JSE crosses 100 000 for the first time
South Africa's benchmark stock index crossed the psychological level of 100 000 for the first time on optimism that a crucial budget vote will get support from key parties in the governing coalition.
The index has advanced about 19% this year, hitting multiple record highs and outperforming a gauge of emerging stocks. The gains have been paced by precious metal miners including Sibanye Stillwater and Northam Platinum.
South Africa's president this week ousted his embattled higher education minister, easing tensions within the governing alliance and clearing the path for the national budget to be approved. Lawmakers will vote on a law that allocates funds to government departments on Wednesday.
Wall Street banks including JPMorgan Chase & Co. and Goldman Sachs Group earlier this month said the country's financial and cyclical stocks are also set to outperform emerging-market peers as Federal Reserve easing creates room for its South African counterpart to cut interest rates.
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Miami Herald
14 minutes ago
- Miami Herald
Why tariffs may not be a big deal after all
Key Points: Tariffs initially caused market anxiety and a 19% S&P 500 decline from February to April.A feared spike in inflation from tariffs hasn't materialized yet. Companies have largely managed tariffs by negotiating lower prices, absorbing costs, or modest price increases, keeping overall inflation mostly in have rebounded as the tariff impact proved less severe than expected. Better-than-forecast outcomes and ongoing trade deals have lifted the S&P 500 to an all-time estimated tariff duties are not being collected because of enforcement complexity. This, along with over 50% of imports not being subject to tariffs, has lessened the drag on the economy. It wasn't that long ago that President Donald's Trump's tariff strategy kicked up a hornet's next of debate. Those favoring tariffs, which are taxes on imports, argue that they are the best way to kick-start U.S. manufacturing. Opponents believe tariffs are inflationary, sparking higher prices that can derail the U.S. economy, risking recession. The truth may wind up landing somewhere in the middle. Tariffs can slow an economy, particularly if they increase quickly and significantly, like what President Trump originally proposed this spring. However, billionaire fund manager Ken Fisher, founder of Fisher Investments, points out that in the U.S., tariffs' impact may be more muted than expected. Image source:Legendary fund manager Paul Tudor Jones equated the originally proposed tariffs as the biggest new tax since the 1960s. In February, President Trump enacted 25% tariffs on Canada and Mexico. He also implemented a 25% tariff on autos, a 10% tariff on all imports, and after much wrangling, a 30% tariff on China. Related: Billionaire fund manager explains why so many missed the stock market rally The end result of those tariffs is that the average effective tariff rate currently is 20.2%, the highest since 1911, according to the Yale Budget Lab. JPMorgan Chase calculates the effective tariff rate was 2.3% in 2024, and is about 17% currently. Either way, a big bump in import taxes led many to worry that U.S. companies would be forced to pass along higher-than-normal price increases, causing inflation to spike and household and business spending to fall. That concern contributed heavily to the S&P 500's 19% tumble from all-time highs in February to the low in April. While risk remains that companies will see revenue growth and earnings slow because of the impact of tariffs, so far, inflation remains manageable. The Consumer Price Index for June showed headline inflation of 2.7%, up from 2.4% in May, but below the 3% inflation rate registered in January. It appears as of now that companies are successfully navigating the tariff hit, mostly through a combination of negotiating lower prices with exporters, absorbing some of the costs, and more modest price increases. More Tariffs: Luxury carmakers have a more aggressive tariff battle planTop 6 cars, SUVs, & trucks that may avoid tariffs, Consumer Reports saysAmazon's quiet pricing twist on tariffs stuns shoppersLevi's shares plan to beat tariffs, keep holiday prices down Of course, some industries - such as autos, appliances, apparel, and furniture - are hit harder by tariffs. Still, overall, inflation has yet to reach levels suggesting a major retrenchment in spending that could further weaken the economy. The better-than-hoped outcome, coupled with optimism that ongoing trade deals, such as the one recently reached with Japan, which lowered tariffs to 15% from 25%, would result in lower tariffs than initially feared, has helped the stock market recover all of its losses since February. The S&P 500 closed on July 26 at an all-time high. Ken Fisher founded Fisher Investments, a money manager with $332 billion in assets under management, in 1979. Over his 45-plus year career, Fisher has seen a lot of good and bad economies and markets. Related: Another automaker is forced to shift strategy due to tariffs He's not a fan of tariffs, saying previously that they historically hurt the country imposing them more than the country they've been imposed upon. Still, he also points out that the widespread threat associated with a tariff-driven economic recession may not be as big as some make it out to be. "Tariff terror abounds, but 'tariffied' investors miss what markets don't," wrote Fisher on X. "While universal tariffs are foolish and a real economic negative, their real world bite is often muted." Fisher had previously forecast that enforcing tariffs would be incredibly difficult, and that we'd see significant difficulty in collecting them. He also opined that high tariffs would likely cause the black-market import business to soar. He appears to be right. "Through June, roughly 39% of estimated tariffs duties were actually collected - far less than many feared - owing to tariff enforcement's complexity," said Fisher. "Markets move on the gap between reality and expectations, and it's always bullish when reality settles in better than overly dour expectations." Fisher also pointed out that over 50% of imports aren't subject to tariffs. This isn't to say that the U.S. economy would be better off without tariffs in terms of growth, but only that the drag on the economy may not be as bad as originally feared. According to Yale Budget Lab, current tariffs are reducing U.S. GDP this year by about 0.8%. In short, the stock market priced in a worst-case outcome from tariffs, providing plenty of room for positive surprises. Anything less than terrible can be viewed as a win that may lift analysts expectations for revenue and profit growth - the lifeblood of stock market returns. Related: Legendary fund manager has blunt message on 'Big Beautiful Bill' The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
32 minutes ago
- Yahoo
Why banks hold the key to the Genius Act's breakthrough for stablecoins
A version of this story appeared in The Guidance newsletter on July 21. Sign up here. Last week, Congress and President Donald Trump passed first US crypto law of its kind. Now come the questions. Right at the top of the list: How will the Genius Act change the digital assets market, and for that matter, finance in general? At first glance, it's safe to say that Washington's newly minted stablecoin regime will reshape the crypto industry by opening the door to banks and other financial firms that wanted regulatory clarity before plying customers with blockchain-related products. This means payments, the lifeblood of the global economy, is ready for change. Turning point There is a lot of excitement around this prospect. Over the weekend Mastercard said the US had reached a 'turning point' in its adoption of blockchain technology for payments processing. As DL News has reported, JPMorgan Chase, Bank of America, and Citigroup are poised to integrate US dollar-backed stablecoins into their product offerings and payment systems. If stablecoins are to be a game changer in payments they have to be largely invisible. In other words, stablecoins should be as seamless in our daily lives as Apple Pay or Venmo or Revolut — utility-like applications we barely think about. This isn't just a technical challenge. It's also a regulatory and consumer behaviour project as well. For starters, stablecoin issuers will have to win over ordinary consumers. That may be challenging considering that stablecoin issuers, unlike banks, are barred from paying interest to accountholders, according to analysis by Gibson Dunn, a global law firm. Enter the banks So why would ordinary US consumers bother with a stablecoin at all? What's the advantage? The answer is fuzzy unless consumers can use them with no fuss. This is where the banks come in. As much as consumers complain about their lenders, they do trust them. If a bank integrates a stablecoin-based payments app, chances are accountholders will respond. While the US banking industry has been wary about the potential instability stablecoins may pose to the financial system, they're sitting in a very strong position to popularise the issuance of these instruments, at least as far as payments are concerned. That's because every stablecoin in the US must now be offered by a 'permitted payment stablecoin issuer' supervised by the Office of the Comptroller of the Currency. For crypto startups, getting regulatory approval, even in the Trump era, is a time consuming, costly task. For banks, it's easy — they are already regulated by the OCC and other agencies. The upshot: banks, the bête noire of the crypto world, are ready to write the next act of the Genius Act. Edward Robinson is the story editor for DL News. Contact the author at ed@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Analyst sounds alarm on S&P 500 for August
Analyst sounds alarm on S&P 500 for August originally appeared on TheStreet. The stock market is on track to deliver another solid month of returns following its nearly 20% drop this spring. In July, the S&P 500 has returned 3% and the technology-heavy Nasdaq has rallied 3.6% so far, bringing the total returns for those indexes since April 9, when President Trump paused many tariffs, to 28% and 38% through July pretty impressive, especially since the S&P 500's annual return has been about 11.6% over the past 50 years. It remains to be seen if the S&P 500 can continue climbing in August to notch a fifth consecutive month of gains. The current rally may be getting a bit long in the tooth, given valuations have arguably stretched and some sentiment measures appear frothy. Long-time market analyst Jeffrey Hirsch, who is behind the closely watched Stock Trader's Almanac, also points out that August isn't necessarily kind to stocks. Stock market seasonal tailwinds ease in August Stocks move up and down for many reasons, including economic changes and revenue and earnings growth prospects. However, there's also a tendency for stocks to perform well in some months and poorly in others, something that the Stock Market Almanac has been tracking since Jeff Hirsh's father, Yale Hirsch, founded it in 1967. The Almanac is a treasure trove of historical probabilities, providing insight into historical index and sector performance Hirsh is credited with identifying the popular Santa Claus Rally, which holds that stocks tend to rise in the final five trading days of a year and the first two trading days of the following year, and the January Barometer, which suggests upside in January will lead to gains for the full year. One of the almanac's most closely considered trends is monthly average returns, and while stocks are historically solid performers in July, the backdrop isn't nearly as friendly in August. "August is the worst month in post-election years for DJIA and Russell 1000, 2nd worst for S&P 500, NASDAQ and Russell 2000," wrote Jeff Hirsch on X. Looking back to 1950, major market indexes have posted negative returns in August, making August one of the worst months of the year for stock market returns. "Average declines in post-election year Augusts range from –0.5% to –1.5%. Each index has seen more declining post-election year Augusts than positive," says Hirsch. According to the Stock Trader's Almanac data, here are the average returns in August for each major index since 1950, unless otherwise noted: Dow Jones Industrial Average: Down 1.5% S&P 500: Down 1.2%. NASDAQ (since 1971): Down 0.8%. Russell 1000 (since 1979): Down 1%. Russell 2000 (since 1979): Down 0.5%. The lackluster performance for these indexes in August ranks them either 11th or 12th worst out of all the months in the year. Dow Jones Industrial Average: 12th S&P 500: 11th NASDAQ: 11th Russell 1000: 12th Russell 2000: 11th. Valuation, the economy, and the Fed will impact what happens to stocks next The stock market has a lot going right for it recently. This spring's sell-off wrung out a lot of excess from stocks, setting the bar low enough so that anything shy of terrible news looks like a that to continue, however, we'll need things to continue to go just about perfectly, given the S&P 500's valuation is arguably stretched. The S&P 500's one-year forward price-to-earnings ratio, a common valuation measure that divides price by expected earnings, is 22.4, according to FactSet. That's about where it was in February, when stocks peaked before the tariff-driven sell-off. How the trade deals shake out with global partners like the EU will go a long way toward determining whether the economy will truly sidestep a recession. President Trump extended his pause on many reciprocal tariffs earlier in July, but set a hard stop date of August 1 for the pause. If trade deals fall short of expectations, rethinking how tariffs may impact inflation and the economy later this year could crimp the market rally. Similarly, most expect the Federal Reserve will cut interest rates in September. So far, there's been little economic data to suggest that's necessary. Consumer Price Index (CPI) Inflation, while sticky, was relatively timid in June at 2.7%. That's higher than the Fed wants, but still down from 3% in December. If unemployment picks up before September, the Fed may reduce rates by a quarter percentage point. The unemployment rate is 4.1%, which is about where it's trended since last summer. If the data remains status quo, with sticky inflation and a stable jobs market, the Fed may decide it can wait even longer before cutting. That may hurt stocks because lower rates fuel expansion and earnings growth. What does it all mean for investors? For most investors, month-to-month seasonality shouldn't impact their long-term investment plans. However, investors who consider themselves active day traders or position traders may want to pocket some of their recent profits to raise a little cash in case they get better buying opportunities if stocks swoon in August. After all, stocks rise over time but don't do it in a straight line. There are plenty of zigs and zags along the way. Analyst sounds alarm on S&P 500 for August first appeared on TheStreet on Jul 27, 2025 This story was originally reported by TheStreet on Jul 27, 2025, where it first appeared. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
