All Share index remains bullish despite Trump’s tariffs

The All Share index on the JSE recorded once again a record-breaking week. The index reached 101 034 points in intra-trade on Friday, gaining 0.2% on the day. The index improved over the week by 3.2%, advancing by 19.7% for the year to date.

Equities are boosted by precious metals as the gold, platinum and palladium prices surged. This despite the introduction of tariffs of 30% by the US Trump administration on a wide range of products imported from South Africa, which kicked in last Thursday. The current debate like the “inability” of the South African government trade negotiators is dominating the media. Despite this noise, South African financial markets are experiencing positive movements.

Although with volatility, the Rand exchange rate ended last week flat at R17.70 to the dollar. The Rand improved by 5.6%, or 100 cents, from R18.70 since January 2, 2025. Since the beginning of the year the price for Gold in terms of dollars has increased by 30%, the Platinum price by 50% and the Palladium price by 29.8%. The Brent oil price ended the week flat on $66 per barrel.

 Global stock markets appear emotionless to Trump’s ‘reciprocal’ tariffs after a week of serious negotiations between the Trump administration and most of the other big economies around the world, like the EU, Great, Britain, China, and Japan. The average effect tariff rate on US imports is now the highest since the 1930s.

US stocks closed mixed to lower on Thursday when the tariffs were introduced, with the Dow Jones losing 0.51% and the S&P 500 fell 0.08%. These indices recovered sharply on Friday. The Dow ended the week 1.4% higher, the S&P50 gained 2.43% and the Nasdaq increased by 1.3%. Of the 87% of companies in the S&P 500 that already had reported earnings for the second quarter, 2025, most of them or 81% of those companies reported earnings higher than Wall Street’s expectations.

Prospects for this coming week

Domestically the release Wednesday by Statistics South Africa of South Africa’s unemployment rate for quarter two 2025 will be of importance for financial markets. The number of jobless people was 32.9% in quarter one and it is expected that the number, as always seasonally, will decrease to 32.6% in quarter two. South Africa’s mining production data for June will also be announced on Wednesday.

Globally, investors will await the release of the US inflation rate for July this coming Wednesday. It is expected that the annual CPI had increased by 2.8%. This is higher than the annual inflation rate of 2.7% recorded for June 2025. This will affect market sentiment negatively as investors will be uncertain about the next move by the Federal Reserve that will be held only on September 17.

The current conflict between President Donald Trump and the Federal Reserve chairperson Jeremy Powell will continue and put markets in uncertainty. The US will also publish its annual production price inflation rate for June on Thursday and its retail sales for July on Friday. It is expected that the monthly growth in retail sales decreased to 0.4% from 0.6% in June. This figure in months to come will be more of importance as the effect of the increased US tariffs will be felt the most by consumers from August. Elsewhere, the UK will announce its unemployment rate for June on Tuesday and its preliminary GDP economic growth rate for quarter two 2025 on Thursday.

Chris Harmse is the consulting economist of Sequoia Capital Management and a senior lecturer at Stadio Higher Education.

*** The views expressed here do not necessarily represent those of Independent Media or IOL.

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