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MONTHLY UPDATE

December 2020

Welcome back and here’s to wishing you a healthy and successful 2021!

2020 once again provided us with an important repeat lesson of the 2008 Global Financial Crisis (GFC) – Central banks are very powerful. They can’t cure viruses and they can’t create jobs, but they can boost confidence and move markets.

Therefore, despite 2020 being one of the most volatile years for stock markets in decades, returns were strong – especially for U.S. and Asian markets. Staying invested (as opposed to attempting to time your way in and out of markets throughout the year) was the most sensible approach during this volatile period.

Looking ahead, whilst the COVID-19 pandemic is likely to ease in 2021 as rapid vaccine programmes are rolled out across the globe, the impact of unprecedented levels of monetary and fiscal stimulus; together with structural changes to how we live our lives are likely to remain with us for years to come.

Some of the more widely expected outcomes for 2021 include (1) a weaker U.S. Dollar caused by Federal Reserve monetary intervention, (2) emerging markets outperforming developed markets as growth is likely to be stronger and valuations more attractive in emerging markets; and (3) active management potentially outperforming passive index funds after a decade of underperformance. We are also likely to see a greater dispersion in returns across markets and asset classes, requiring investors to focus on fundamentals of individual companies and sectors for results. We elaborate on some of these themes in more detail in our Latest Insights.

Market moves of the month

SA MARKETS LAST PRICE DEC 2020 MOVES YTD MOVE
JSE ALL-SHARE 59 409 4,1% 4,1%
RESOURCE 10 57 576 9,2% 16,9%
INDUSTRIAL 25 77 901 -1,3% 12,4%
FINANCIAL 15 12 060 8,1% -23,1%
SA LISTED PROPERTY 273 12,5% -38,6%
GLOBAL MARKETS  LAST PRICE DEC 2020 MOVES YTD MOVE
DOW JONES 30 606 3,3% 7,2%
S&P 500 3 756 3,7% 16,3%
NASDAQ 12 888 5,7% 43,6%
EURO STOXX 50 3 553 1,7% -5,2%
FTSE 100 6 461 3,1% -14,3%
NIKKEI 225 27 444 3,8% 16,0%
SHANGHAI 3 473 2,4% 13,9%

 

CURRENCIES  LAST PRICE DEC 2020 MOVES YTD MOVE
USDZAR 14,69 -5,0% 5,0%
GBPZAR 20,09 -2,5% 8,3%
EURZAR 17,95 -2,7% 14,5%

Source: Factset

Explore the chartbook for the month of December.

Market Update (December 2020)

Latest Insights

These and other macro insights are covered in more depth in our latest Market Update above.

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