July 2025 Update
Making The News
- US Tech Rally
US equity markets outperformed in July, led by technology stocks and strong corporate earnings. The Nasdaq rose 3.7% MoM (+9.4% YTD) and the S&P 500 gained 2.2% MoM (+7.8% YTD), reaching six consecutive record highs before easing into month-end. The Bloomberg Magnificent Seven Index climbed 5.8%, driven by AI optimism and robust earnings. Nvidia (+12.6%) led gains after Trump pledged to lift AI chip export bans to China, while Alphabet, Meta, and Microsoft rose on upbeat results and increased AI capex. Meanwhile, Tesla lagged (-8% MoM) on weak earnings.
- Global Equity Gains
Global equity markets gained modestly in July (MSCI World +1.3% MoM / +11.2% YTD), underpinned by strong US corporate earnings, easing trade tensions, and improved investor sentiment. Optimism around AI-driven growth and resilient global GDP forecasts added support, with the IMF raising its 2025 global growth projection to between 2.7% and 3.0%. However, concerns about market overheating re-emerged late in the month, as US high-margin debt levels exceeded US$1 trillion and policy uncertainty lingered.
- JSE Rally and retreat
In July, the FTSE JSE All Share Index surpassed the 100,000-point mark for the first time, closing at 100,179.84 on 23 July, before pulling back to end the month at 98,519.51 (+2.2% MoM / +17.2% YTD). Gains were largely driven by commodity-linked shares (Resi-10 +5.1% MoM), particularly gold and platinum miners, amid strong metal prices and geopolitical tailwinds. Listed property also advanced (+4.8% MoM), buoyed by the interest rate cut, while industrials and financials delivered modest returns.
- SARB Policy Shifts
As anticipated, the SA reserve bank cut the central bank rate by 0.25% during July, lowering the prime lending rate to 10.5%. The decision was supported by subdued inflation, with June’s headline CPI rising slightly to 3.0% YoY (from 2.8%) during May. The SA government 10-year borrowing rate fell in lock step with the rate cut, falling by 0.25% during the month, despite global bond rates generally increasing during the month. SA bond investors were also happy with the MPC announcement that it would target a 3% inflation rate going forward. The rand fell by 1.8% to the dollar during the month, after President Trump levied a hefty 30% import tariff against South Africa
