United States tariff refunds rolling in, and Ramaphosa gets a win

South Africa’s rand continued its strong performance this week on Wednesday, 12 August, remaining near a five-month high.

The local currency was buoyed by a weaker dollar after US inflation data met expectations, giving some investors hope that the Federal Reserve will keep interest rates unchanged.

The JSE All Share Index ended Wednesday in the red, down 0.83%, with the Top 40 Index seeing a similar decline.

This came as local markets reacted to cautious global risk sentiment and braced for domestic economic data releases, such as South Africa’s mining production figures.

Local indices were also dragged down by weakness in major industrial and tech stocks, including Naspers and Richemont.

In contrast to the local bourse, Asian equity markets, including the Nikkei, Hang Seng, and Shanghai Composite, were up on Wednesday.

KOSPI was the standout, up 3.98% to a fresh record high as Asian tech stocks caught a tailwind from Wall Street.

Wall Street also closed firmer yesterday, with the NASDAQ Composite up 0.5% on the back of stronger-than-expected artificial intelligence earnings from companies like Super Micro.

The S&P 500 also added 0.26%, notching up its first gain since Friday’s record high, while the Dow slipped 0.1%.

In commodities markets, Brent crude oil is trading lower at $88.85 per barrel, ending a six-day advance.

However, gold is holding near 10-week highs at $4,409 per ounce, buoyed by the tamer US inflation backdrop and a dollar that is treading water.

On Thursday morning, the rand was trading at R16.14 to the US dollar, R18.61 to the euro, and R21.79 to the British pound.

Important finance and investing news

American tariff refunds are here: Tariff refunds from the United States government have begun showing up in the earnings reports of American companies. Among the biggest refunds reported so far are Apple, at nearly $2.2 billion, Nike at $986 million, FedEx at about $800 million, Amazon.com at $640 million, and General Motors at $500 million. [Wall Street Journal]

Ramaphosa wins at the ConCourt: The Constitutional Court has dismissed a bid by political parties and Parliament’s Impeachment Committee to appeal an interim interdict which has prohibited public hearings in the Phala Phala matter. [EWN] 

Grindrod shares plunge 11%: Shares in Grindrod fell by 11% on the JSE as the company reported that its upcoming half-year earnings will rise by 4% to between R597.6 million and R617.6 million. Investors are concerned about the impact of a one-off R902.8 million net profit boost from last year, which will not be repeated. [BusinessDay] 

US inflation relief: Inflation in the United States came in as expected at 3.4% year-on-year, providing some relief for investors betting on interest rate cuts. Investors interpreted the data as giving the Federal Reserve less urgency to raise rates, with the market-implied probability of a September hike falling to 40% from 48% a day before. [Wall Street Journal]

Anthropic nears $6 billion deal: Anthropic is in talks to buy the artificial intelligence startup Decart AI for about $6 billion. Decart’s software can reduce the cost of training artificial intelligence models by helping chips work more efficiently. That technology could help Anthropic’s existing infrastructure absorb more demand. [Bloomberg/Yahoo Finance]