Here the UK 5, 10 & 30 year bonds for September .(with correct carts) . Just September pic.twitter.com/hMj5yP65bC
— Simon Brown (@SimonPB) September 28, 2022
The US$ Index (code: DXY) is at twenty-year highs and within a few percent taking out the highs from the early 2000s and heading back to levels last seen in the mid-1980s.
The reasons are simple and two-fold;
Importantly this is hitting every currency in the world.
Has earnings implications for US companies selling products offshore as those profits are now lower due to US strength.
When does the strength stop?
What to do?
The tables have turned. Emerging markets are much more resilient against the US Dollar than the rest of the G10. Year-to-date, the Dollar has risen a stunning 15% against the G10 (black), but only 5% against emerging markets (blue). EM is the new standard bearer for stability... pic.twitter.com/ToaQvQB9DS
— Robin Brooks (@RobinBrooksIIF) September 27, 2022
The problem is getting back to target.
Rate increases still coming, likely into the new year before pausing.
Then the long wait for inflation to get to target (or near) before rates start coming down. In the US this is at best 2024 but probably 2025. Locally rates may start moving lower in early 2024.
Shoprite* (JSE code: SHP) results saw the stock down 7.5%. Let's dig into what the market maybe didn't like.
But Shoprite remains one of the best food retailers globally and a core holding in my portfolio. I have bids in the market at around R170 which would put it on a PE closer to the mid-range from the last decade.
Sixty60 grew 150% and remains the absolute market leader in the grocery delivery space.
Checkers Xtra Savings has 24.7m members and it turning into a bank account.
Murray & Roberts weekly chart
Not a lekker chart, I've held for a while, but am now out #JSE pic.twitter.com/BKKP4HOLhr
— Simon Brown (@SimonPB) September 4, 2022