Global Market Themes: The US Fed and other central banks pump liquidity An uneven and unpredictable road to recovery Global bodies predict record contractions in GDP for 2020 Economic indicators show a few encouraging signs Markets swing between exuberance and caution amidst second wave of Coronavirus infection fears SA Market Themes: SA remains in recession as Q1 2020 GDP contracts by 2% Emergency budget paints a gloomy picture Risk-on appetite and commodities rally spur JSE higher Easing of severity of Level 3 lockdown, even as warnings come of a new hard lockdown

Global Market Themes: United States unemployment soars to record highs US futures pricing in negative federal funds rate in 2021 UK short-term rates go negative UK faces no-trade deal Europe and Japan stimulus measures Sino-US tensions escalate – Phase One deal in jeopardy Hong Kong adds fuel to the fire – new Chinese national security law puts special status at risk SA Market Themes: SA Reserve Bank cuts a further 50 bps Lockdown moves to Level 3 from 1 June Tax revenue collection under pressure Rand recovery to be gradual yet volatile

Here are this month’s highlights: April was a month of record lows all-round with the global economy forecasted to see its steepest decline since the Great Depression of the 1930s. The South African Reserve Bank reduced the repo rate by a further 100 basis points; South Africa exited the FTSE World Government Bond Index (WGBI) on 30 April; local equity indices rebounded strongly following global peers higher; SA listed property recovered in April in line with equities and bonds; new economy companies such as Amazon, Netflix and Microsoft were net beneficiaries as the world further embraces e-commerce, media streaming and online gaming; and currency performance was mixed.

Here are this month’s highlights: The world economy continues to feel the impact of the COVID-19 outbreak and subsequent spread. The South African Reserve Bank cut its repo rate by 100 basis points. Inflation-linked bonds experienced its worst month on record. Local equity indices experienced its most severe declines since the Global Financial Crisis. Declines in Property effectively halved the value of the SA Property Index in just three months. Globally, there was a large-scale scramble for safe-haven assets and there is a general consensus among major global banks of a global recession in 2020.

Here are this month’s highlights: Cash was up 47 basis points in February and bonds were largely flat. South Africa entered a technical recession. The US and China lowered existing import tariffs per the phase 1 trade agreement. This was largely overshadowed by the spread of the coronavirus outbreak that saw global markets fall.

Here are this month’s highlights: The South African Reserve Bank reduces interest rates; local equity suffered the effects of the coronavirus outbreak as did the property sector which experienced persistent downward selling pressure and commodities were also significantly affected with investors pricing in the potential slow-down in China and its impact on global growth. Investors seek safety in global fixed income assets during times of market uncertainty. Brexit finally occurred and the phase-one deal was signed by the US and China, but was largely overshadowed due to the coronavirus outbreak.

Here are this month’s highlights: Inflation is expected to remain the same going into 2020. However, consumers can expect increasing electricity, water and fuel prices in the new year. Local bond markets ticked up and local equities posted decent gains with SA Inc stocks trading at significant discounts, creating opportunities for astute investors. The South African listed property sector was the worst performing asset class. Emerging Markets ended the year on a positive note, while the US and China reached a phase one trade deal. The rand proved resilient despite the Eskom-induced gloom.

Here are this month’s highlights: South African assets struggled in November, underperforming global peers. Sentiment regarding trade talks swung between optimism and concern: A ‘Phase One’ trade deal seemed imminent after China promised improved policing of Intellectual Property Rights but appeared to be at risk after US President Donald Trump provoked Beijing’s displeasure by supporting pro-democracy protests in Hong Kong. Risk-on, however, remained the prevalent sentiment and November was a particularly good month for developed market equities.