Wednesday's Markets Update (December 6, 2023)

07 Dec 2023 by rate3

On Wednesday, the Nasdaq turned negative due to energy and megacap declines, despite earlier gains on cooling job data reinforcing expected Fed easing. Meanwhile, BTC went sideways just under 44K, and ETH retreated below 22.2K.

Details

103K workers were hired in Nov, below expectations of 130K. Services added 117K led by trade/transport/utilities, education/health, financial activities, while losses in leisure/hospitality, professional services. Goods shed 14K due to manufacturing, construction losses. Pay growth slowed - job-stayers saw 5.6% increase, smallest since Sept 2021. Job-changers saw 8.3% pay gains, least since June 2021.

World Markets (Africa)

Nigeria: The NSE index hit a record high at 71866, gaining for a second day on consumer stocks like FBN, Coronation Insurance, Access Bank and UBA. The Nigerian market has risen since President Tinubu took over May 29 on reforms, despite inflation, rate hike and forex fears.

South Africa: The JSE rose 0.3% despite fears of 2023 recession on poor Q3 GDP and power cuts. Top gainers were Amplats, Redefine, Implats and MTN, up over 3% each. British American Tobacco fell over 10% on a $31.5bn impairment from US brand pressure.

Ghana: The Ghana PMI rose to 51.6 in Nov from 50.5, indicating a tenth straight month of private sector growth and the highest since Aug. Output and new orders rose at a 3-month high. Job creation has lasted 12 months. Selling prices inflation accelerated but was below the average and 2022. Firms remain optimistic.

Uganda: The Bank of Uganda held rates at 9.5% as inflation eased to 2.6% in Nov from tight policy, good harvests, stable forex, lower global inflation. Core inflation was 2%, below the 5% target. Growth is seen at 6% in FY2023/24, 6-7% medium-term.

Namibia: Namibia's central bank held its key rate at 7.75%, the highest since Apr 2019, for a third straight month to protect the rand peg and support growth. Inflation rose to 6% in Oct, a 5-month high, for a fourth month. Growth slowed in 2023 on weak construction. Risks are global slowdown, tight policy, geopolitics and South Africa's power cuts.

Comment

Africa's economic situation is diverse and complex, reflecting the continent's vast size, varied geography, and differing political and economic systems.

The Mediterranean region, which includes countries like Egypt, has been politically troubled, but it has shown some economic resilience. Egypt, for instance, has one of the largest nominal GDPs in Africa at ~$400 billion. Mediterranean countries have a GDP that is approximately the world average.

Sub-Saharan Africa, which includes many of the continent's poorest countries, is expected to see economic growth slow to 2.5% in 2023. The region's largest economy, Nigeria, has a nominal GDP of $390B. The region faces significant challenges, including conflict, climate shocks, and poverty.

The West Coast of Africa, which includes countries like Ivory Coast, is relatively well-off compared to other parts of the continent. Ivory Coast has a nominal GDP of $79B billion

The Central African region, which includes countries like the Central African Republic, is characterized by conflicts and difficult political regimes. The Central African Republic has a nominal GDP of $2.760B.

South Africa, once the dominant economy in Africa, has been declining but still has a significant economy with a nominal GDP of $380B

The East Coast of Africa, which includes countries like Ethiopia and Kenya, has been friendly to Chinese investment. Ethiopia has a nominal GDP of $155B, and Kenya has a nominal GDP of $112B

Inflation has started to subside across the African continent, which is a positive sign for economic stability. However, the great discrepancy and uncertainty of economic policies country by country make it a fertile ground for cryptocurrencies.