Shares
 
FAQs

Visit our FAQ page to find the answers to the most commonly asked questions, including how to create an account, explaining ETFs, and providing useful links, forms, and tables.

FAQs
Shares

Start investing in South African shares the smart way. Discover ThinkTrader today.

Start Investing
Learn To Trade
 
Indicators & Chart Patterns

Deepen your knowledge of technical analysis indicators and hone your skills as a trader.

Find your detailed guides here
Trading Glossary

From beginners to experts, all traders need to know a wide range of technical terms. Let us be your guide.

Learn More
Trading Glossary

From beginners to experts, all traders need to know a wide range of technical terms. Let us be your guide.

Learn more
Knowledge Base

No matter your experience level, download our free trading guides and develop your skills.

Learn more
Learn To Trade

Trade smarter: boost your skills with our training resources.

Create a live account
Market Analysis
 
Market News

All the latest market news, with regular insights and analysis from our in-house experts

Learn more
Economic Calendar

Make sure you are ahead of every market move with our constantly updated economic calendar.

Learn more
Technical Analysis

Harness past market data to forecast price direction and anticipate market moves.

Learn more
Live Webinars

Boost your knowledge with our live, interactive webinars delivered by industry experts.

Register now
Special Reports

Engaging, in-depth macroeconomic analysis and expert educational content from our in-house analysts

Learn more
Market Analysis

Harness the market intelligence you need to build your trading strategies.

Create a live account
About ThinkMarkets
 
Liverpool FC Sponsorship

ThinkMarkets is the Official Global Trading Partner of Liverpool FC

Learn more
About Us

Find out more about ThinkMarkets, an established, multi-award winning global broker you can trust.

Learn more
Careers

Discover a range of rewarding career possibilities across the globe

Apply now
Security of Funds

Security of your funds is our number one priority. We safeguard our Client funds in top tier banks.

Learn more
Trading Infrastructure

When it comes to the speed we execute your trades, no expense is spared. Find out more.

Learn more
ThinkMarkets News

Keep up to date with our latest company news and announcements.

Learn more
Contact Us

Our multilingual support team is here for you 24/7.

Learn more
About ThinkMarkets

Global presence, local expertise - find out what sets us apart.

Create a live account
Create account

Monday’s Bullseye: 18 October 2021

Fawad Razaqzada Fawad Razaqzada 18/10/2021
Monday’s Bullseye: 18 October 2021 Monday’s Bullseye: 18 October 2021
Monday’s Bullseye: 18 October 2021 Fawad Razaqzada
After last week’s strong performance, European stock indices and US futures eased back a touch in the first half of today’s session. Investors were a bit cautious with earnings season ramping up, while ongoing concerns about inflation also held the markets back a touch. Meanwhile, more signs emerged that growth is weakening at the world’s second largest economy, China, with GDP expanding by 4.9% in Q3 from a year earlier, slowing down sharply from 7.9% in Q2. Not that it mattered for oil, however, as prices broke to fresh multi-year highs on rising fears over a global energy crunch ahead of winter. Rising oil and energy prices have raised concerns inflation is going to be stick and not as transitory as the ECB ad Fed officials continue to suggest. These concerns are reflected in rising bond yields, especially on the shorter end of the curve. The ECB wants to see if inflation will be reflected in wage talks and other potential second-round effects that could drive prices higher more permanently.  Meanwhile, the Bank of England’s Governor Andrew Bailey said the central bank will "have to act" to ease price pressures. UK’s 2-year bond yields surged another 16bps this morning. Rising yields kept gold under pressure after it sold off on Friday.
 
 
 
The slight weakness at the start of this week comes on the back of a solid last week for global stocks. US indices extended their recovery on Friday as Goldman Sachs became the latest Wall Street giant to beat earnings estimates, while retail sales at the world’s largest economy also surprised to the upside with a gain of 0.7% despite concerns about inflation chippy away at consumers’ disposable incomes. Calm had actually returned to the markets in the middle of the week, when we saw global indices recover sharply – especially on Thursday. Investors decided enough was enough and bought the latest dip as they presumably figured that all the talks surrounding inflation and supply-chain issues were overblown. Judging by the bank earnings and the latest retail sales data, they may have a point. Commodity dollars rose along with oil and metal prices, while the Japanese yen continued to fall out of favour as investors moved into higher-yielding commodity dollars and the pound.  Japanese bond yields remain subdued because of the ongoing intervention by the Bank of Japan and no one believes it will be tightening its monetary policy any time soon, unlike some of the other major banks such as the Bank of England and US Federal Reserve.
 

Looking Ahead

Judging by the sharp reversal in risk appetite last week, we might see some further follow-through in risk-taking in the early parts of this week once the markets find their feet after a sluggish start. Overall, it looks like the reflation trade is back, with investors probably reckoning that a prolonged period of above-trend inflation, combined with weaker economic growth, is not very likely as the impact of temporary factors and supply bottlenecks are likely to subside in the not-too-distant future.
 
As such, the markets probably don’t expect central banks to tighten their policies meaningfully anyway – something that the Fed, BoE and others have indicated. Central banks wouldn’t want to choke off economic growth by being too aggressive when they tighten their policies especially as there have been some signs of weakening recovery of late.
 
Still, the likes of the pound and US dollar should be able to rise further against the currencies where the central bank remains dovish such as the Swiss franc, having already soared against the yen. So, concentrating on GBP/CHF and similar crosses in the week ahead makes perfect sense.
 
 
That being said, if inflation really gets out of control, then that’s when we might see some panic creep back into the markets. So, keep a close eye on energy prices and other inflation signals – we have UK CPI coming up on Wednesday.
 
Meanwhile, the earnings season has started quite strongly with Wall Street banks all producing results that beat expectations last week. This has been an additional factor supporting the markets, raising hopes that we might see better-than-expected results from other sectors in the weeks ahead. See the data and earnings highlights section below, for more.
 

Data and earning highlights coming up

 
Monday
 
  • US industrial production and NAHB Housing Market Index
 
Tuesday
 
  • US Building Permits and Housing Starts
  • Central bank speeches: BoE Governor Bailey and FOMC’s Daly and Bostic
  • Earnings: Netflix, Johnson & Johnson
 
Wednesday
 
  • UK CPI
  • Crude oil inventories
  • Earnings: Tesla, IBM and Berkshire Hathaway
 
Thursday
 
  • US Jobless Claims, Philly Fed Manufacturing Index and Existing Home Sales
  • Earnings: Intel, PayPal and Snap
 
Friday
  • Eurozone and UK flash and manufacturing PMIs
  • Retail sales from UK and Canada
 

Chart to watch: FTSE

 
Keep a close eye on the FTSE after it broke out of a 6-month consolidation pattern to the upside last week.  The FTSE is a commodity-heavy index, so the big gains we have seen for crude oil and copper prices have helped energy stocks and miners. Meanwhile, banks have risen along with yields in recent times, as investors have become optimistic about a steady economic recovery and look forward to mild policy tightening from the Bank of England.
 
FTSESource: ThinkMarkets and TradingView.com
 
If the breakout can be sustained, we might see the FTSE march higher in the week ahead and climb towards the 2020 peak at 7690 and the all-time high that was hit in 2018 at 7903. At the start of this week, the index has pulled back to re-test the breakout area around 7200.
 

The South African Markets in Focus

By Kearabilwe Nonyana

These are unprecedented times in the markets. The world is emerging from the coronavirus pandemic and the economic activities which are transpiring are set to change the course of how we view normative economics. With supply bottlenecks and unprecedented self-reliance on local supply chains, a lot of shortages of basic energy commodities have caused short-term price spikes and have threatened the industrial production output of the world’s most industrialized countries. On our local bourse, a few stocks have been affected by this conundrum as high energy costs are one of the biggest contributors to higher overall inflation, considered to be negative for economies. With all that said, our local bourse is set to end the week off on a higher note, along with the global markets (see above). With the resources 10 index gaining nearly 8%, led by global diversified miner and platinum miners.
 
 
 
The Week Ahead

The local economic calendar is light on the week but there is an important economic data point that will set the way risk assets in our local market are viewed. Inflation data will be released on Wednesday. In August, inflation had quickened past the midpoint of the target band of 4.5% to 4.9%. The inflationary pressure is on the up, not because of demand but administered prices and energy prices. The increase in the baseline price in Brent crude and the resultant weakness in the Rand will have a base line effect on the headline CPI number. Interest-rate sensitive stocks could be affected if the inflation rate continues closer to the upper band of 6%. Banks and retailers could be affected negatively if inflation keeps on going up.

 
 
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

Related articles:

Fears over efficacy of vaccines against Omicr...

By Fawad Razaqzada

30/11/2021

Think Daily 30 November 2021

By Kearabilwe Nonyana

30/11/2021

Think Daily 29 November 2021

By Kearabilwe Nonyana

29/11/2021

Monday’s Bullseye: 29 November 2021

By Fawad Razaqzada

26/11/2021

Black Friday Sale: New Covid variant roils ma...

By Fawad Razaqzada

26/11/2021

Meet our contributors
Fawad Razaqzada
×
Fawad Razaqzada
Market Analyst, London

Fawad is an experienced analyst and economist having been involved in the financial markets since 2010, producing market commentary and research for a number of global FX, CFD and Spread Betting brokerage firms. He leverages years of market knowledge to provide retail and professional traders worldwide with succinct fundamental & technical analysis. Fawad also offers trading education to help shorten the learning curves of developing traders.
 
His colleagues consider him an expert at reading price action on the charts. This together with his deep understanding of economics and fundamental analysis, and trading experience, puts him in a great position to forecast short term price movements. Fawad covers a wide range of markets, including FX, commodities, stock indices and cryptocurrencies and his comments are regularly quoted by the leading financial publications such as Reuters and Market Watch. In addition to ThinkMarkets, Fawad also provides analysis and premium trade signals on his own website at TradingCandles.com.
 
 

Carl Capolingua
×
Carl Capolingua
Market Analyst, Melbourne

Carl has over 20 years' experience in financial markets and has held senior analyst roles at a number of financial institutions. Specialising in Australian and US stock markets in particular, Carl uses a top-down approach to assess the global macro picture before using both technical and fundamental techniques to select stocks. He regularly appears as an expert commentator on a number of media outlets throughout the Asia-Pacific region.
 
 
 

Kearabilwe
×
Kearabilwe Nonyana
Market Analyst, South Africa

Kearabilwe is an experienced Sales trader and Analyst specialising in Equity and Equity derivatives. His career in the financial markets has seen him hold various positions in global investment banks and global CFD and Spread betting firms. He has deep interest in using quantitative methods to help him understand and teach the fundamental drivers of asset prices.
 
 
 

Fawad Razaqzada
Fawad Razaqzada
Fawad is an experienced analyst and economist having been involved in the financial markets since 2010, producing market commentary and research for a number of global FX, CFD and Spread Betting brokerage firms.
Carl Capolingua
Carl Capolingua
Carl has over 20 years' experience in financial markets and has held senior analyst roles at a number of financial institutions.
Kearabilwe
Kearabilwe Nonyana
Kearabilwe is an experienced Sales trader and Analyst specialising in Equity and Equity derivatives.

Feel confident?

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Back to top