+27 11 8867273 INFO@MJSWEALTH.CO.ZA

INVESTMENT MARKET UPDATE

JULY 2025

What developments have unfolded in local and global markets throughout the month of JULY?

30%

Tariffs will be imposed on all SA exports to the US, with some exceptions

100,000 Points

JSE All Share Index soared to a record high in July

80%

Of companies in the S&P 500 beat earnings forecasts

GLOBAL MARKET

_______________________

🌍 Global Markets: Growth, Tariffs & Tech-Led Optimism

July was a month of cautious optimism in global markets, with strong corporate earnings and resilient macro data offsetting rising geopolitical and trade-related risks.

U.S. Trade Policy remained front and center. President Trump’s announcement of a baseline 15% tariff on imports—lower than previous rounds but still significantly above historical norms—helped avoid a full-scale trade war. Agreements with key partners like Japan and the EU brought temporary relief, though the elevated tariff levels (last seen in the 1930s) are expected to push up inflation and pressure profit margins and consumer prices.

Middle East tensions and the expiration of the 90-day tariff pause added to market jitters. While many tariffs are now considered “known risks” and priced in, any unexpected escalation triggered volatility, especially in commodity and export-sensitive sectors.

Despite these headwinds, Q2 earnings season delivered a strong upside surprise, led by U.S. tech giants. This helped the S&P 500 post mid-single-digit gains, while the Nasdaq surged 3.7%, driven by robust performance in AI and semiconductor sectors. Bond yields ticked higher on better-than-expected growth metrics, reflecting a market caught between growth optimism and rate-cut anticipation.

Investors closely parsed every word from the Federal Reserve, which held rates steady at 4.25%–4.50%. With inflation rising to 2.7% and signs of economic cooling, the probability of a September rate cut climbed sharply. This dynamic kept both short- and long-term yields under pressure, as markets positioned for an eventual easing cycle while bracing for ongoing policy uncertainty. This dynamic kept both short- and long-term yields under pressure.

Global Market Highlights:

  • MSCI World Index: +1.3%
  • MSCI Emerging Markets: +2%
  • S&P 500: +2.2%
  • FTSE 100 (UK): +4.2%
  • Shanghai Composite (China): +3.7%
  • Hang Seng (Hong Kong): +2.9%
  • Nikkei (Japan): +1.4%

Key Themes for Investors:

  • Tariff risks remain elevated, but markets are adapting.
  • Central banks outside the U.S. are easing, supporting global liquidity.
  • Strong earnings and AI-led investment continue to drive equity strength.
  • Policy uncertainty and geopolitical risks require careful portfolio positioning.

 

Rand / US Dollar:

  • In July, the Rand lost 1.7% against the USD, from a gain of 1.5% in June and 3.1% in May
  • This compares with the long-term monthly average
    • appreciation of 3.9%
    • depreciation of -4.2%

 

Rand / Euro:

  • In July, the Rand gained 0.5% against the EUR, lost 2.6% in June and from 4.0% in May.
  • This compares with the long-term monthly average:
    • appreciation of 2.8%
    • depreciation of -3.2%

 

Rand / British Pound:

  • In July, the Rand gained 1.8% against the GBP, flat in June and from 3.6% in May.
  • This compares with the long-term monthly average
    • appreciation of 3.1%
    • depreciation of -3.1%

 

ANALYTICS - COMMENTARY FOR JULY:

Click Here

SMARTIE BOX IN RANDS:

CONTACT US

LOCAL MARKETS

__________________________

South African Markets: A Turning Point in Policy and Market Confidence

July 2025 marked a pivotal moment for South Africa’s economic and financial landscape, as the South African Reserve Bank (SARB) made a significant shift in its monetary policy stance. The repo rate was cut by 25 basis points to 7.00%, a move that was widely anticipated but still symbolically important.
In a notable policy pivot, Governor Lesetja Kganyago announced that the SARB would now aim to anchor inflation closer to the lower end of its 3%–6% target band, effectively targeting 3% over time. This dovish shift reflects growing confidence in the country’s inflation containment, supported by:
  • Core inflation falling to 2.8%, the lowest level since 2021
  • Headline inflation at 3.1%, well within the target range
  • Declining breakeven rates, indicating subdued inflation expectations
This policy recalibration aligns South Africa with the global trend of gradual monetary easing and is expected to:
  • Stimulate domestic investment and consumption
  • Enhance the appeal of local bonds and equities
  • Act as a stabilising force for capital markets

⚠️Geopolitical Risks: Trade Tensions with the U.S.

While monetary policy brought optimism, geopolitical developments introduced new risks. The U.S. imposed tariffs of up to 39% on key South African exports, including agricultural and automotive goods. Although President Ramaphosa engaged in direct negotiations to delay or soften these measures, the threat remains substantial, with potential implications for:
  • Up to 100,000 jobs
  • Export competitiveness
  • Investor sentiment and capital flows
These developments have injected volatility into local capital markets, particularly in sectors sensitive to global trade and commodity cycles. The uncertainty surrounding South Africa’s trade relationship with the U.S. could influence portfolio allocations, especially among foreign investors. Despite the geopolitical headwinds, South African financial markets delivered strong performance in July, supported by: Lower interest rates, Contained inflation, Improved fiscal clarity following the passage of the Appropriations Bill. JSE All Share Index briefly crossed the 100,000-point milestone for the first time, before closing at 98,519 and gains were broad-based, reflecting renewed investor confidence.

 

  • The JSE All Share recorded its fifth straight month of gains, up 2.3%.
  • All three major sectors supported the bourse, as Industrials (up 2.5%), Financials (up 1.3%) continued to grow, while Resources (up 5.1%) rocketed higher.
  • Small-caps (up 3.1%) and Mid-caps (up 3.3%) boasted healthy returns, outperforming their larger peers, as the Large-caps (up 2.3%) reported modest gains.
  • The SA Property markets beast most other asset classes in July, as the ALPI added 4.8%, and the S&P SA REIT index grew 6.0%.
  • SA Nominal Bonds (up 2.7%) continued their positive performance. Inflation-Linked Bonds inched higher, up 0.6% as SA inflation remains muted.
  • Developed Market Equities closed higher in US dollar terms, as the MSCI World Index rose 1.3%, however, their emerging market peers continued to outperform, as the MSCI Emerging Market Index soared 2.0% higher.
  • The rand had a mixed month in terms of performance, as the US dollar weakened, but other major currencies appreciated. Relative to the US Dollar (Rand appreciated 1.8%), the Euro (Rand depreciated 0.8%) and the Pound Sterling (Rand depreciated 1.7%).
  • Resources were generally lower, as Gold (up 0.0%) and Platinum (down 1.7%) dropped. Brent Crude gained 7.3% over the month, as geopolitical tensions escalated.

Everything you need to know about tax-free investments

Click Here

Inflation, tax and your fixed deposit

Click Here

MONTHLY RETURNS:

SPEAK TO AN ADVISOR
468