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The financial markets reacted positively to signs of slowing economic activity in the US and other regions, as indicated by the lower-than-expected job creation, an increase in the unemployment rate, and the contraction in the composite Purchasing Manager Index. Investors normally anticipate that slower economic growth may reduce the demand for goods and services, and hence ease the upward pressure on inflation and further interest rate increases. For now, it seems the market consensus is that the interest hiking cycle is over, and the global economy will experience a mild slowdown, i.e., the soft-landing scenario. We however remain slightly more cautious for now.


With the markets assigning a higher probability to a soft-landing, equity markets recorded strong gains for November. Asset classes that benefits from falling interest rates, like property, infrastructure and bonds, also delivered strong gains for the month. South African equity lagged the global equity markets, as the local resource companies Sasol (-11.3%), Impala Platinum (-1.4%) and Sibanye Stillwater (-13.0%) come under pressure. Read more.

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