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Weekly Note - 18 August 2025

August 18, 2025 by
Weekly Note - 18 August 2025
Nicholas

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Local Market Update: 

The Johannesburg Stock Exchange (JSE) experienced modest fluctuations, with the Top 40 Index declining by 0.07% and the All Share Index falling by 0.04%. Economic indicators suggest a third consecutive quarterly GDP expansion, with Q2 growth estimated at 0.4%, driven by manufacturing and mining sectors. However, concerns arose over potential impacts from new US tariffs on automotive, metals, and agricultural exports. In corporate developments, Barloworld secured approval for a R23.3 billion acquisition by a Saudi-linked consortium.

 

European Market Update: 

European equities experienced mixed performance, with the STOXX 600 index declining by 0.1%. Tech and financial sectors faced pressures, notably after Applied Materials reduced its outlook due to soft Chinese demand and tariff uncertainties, affecting stocks like ASML and BE Semiconductor. In the UK, Standard Chartered's shares fell 7.2% following a US probe into potential sanctions breaches. Additionally, geopolitical tensions persisted, influencing market sentiment.

 

US Market Update:

US equities reached new highs, with the Dow Jones hitting an intraday record, bolstered by a 12% surge in UnitedHealth shares following increased Berkshire Hathaway ownership. Corporate earnings exceeded expectations, with S&P 500 profits up approximately 12% year-over-year, driven by the tech sector. However, mixed economic data, including weak confidence and factory output, clouded the Federal Reserve's policy outlook. Investors are awaiting insights from the Jackson Hole Economic Policy Symposium.

 

Asia Market Update: 

Asian markets exhibited a risk-on sentiment, with Japan's Nikkei and Taiwan's indices reaching record highs, and China's blue-chip stocks hitting a 10-month peak. The Shanghai Composite Index rose 1.7%, and Hong Kong's Hang Seng Index gained 1.65%. The positive momentum was supported by renewed tariff pauses between the US and China. However, Hong Kong's property sector faces challenges, with rising debt repayment risks and declining market conditions.


 Currency Market Update: 

The US dollar showed modest movement, with markets awaiting key geopolitical and economic developments. Investors closely watched meetings between US President Donald Trump and Ukrainian President Volodymyr Zelensky, aimed at facilitating a peace deal in Ukraine. The Federal Reserve's Jackson Hole symposium is anticipated to influence expectations on interest rates. Currency movements were muted overall, with the euro holding steady at $1.1705 and sterling edging up to $1.3557.


Commodity Market Update: 

Commodity markets experienced volatility, with oil prices fluctuating due to geopolitical developments. Gold prices remained steady amid firm US inflation data, tempering expectations of aggressive Federal Reserve easing. The market focus shifted to the Trump–Putin summit in Alaska, where prospects of a comprehensive Ukraine peace deal raised geopolitical stakes. Additionally, Hurricane Erin's impact on energy infrastructure contributed to market uncertainties.