China’s economy, long seen as a key driver of global growth, has entered a period of significant slowdown. In the third quarter of 2024, the economy expanded by 4.6% year-on-year, marking the weakest growth in 18 months and falling short of the government’s 5% full-year target.
The first interest rate cut by the Federal Reserve (Fed) has happened and now the focus has shifted from “when” to “where”: Where are interest rates heading next? This shift is more than a mere change in phrasing; it is a sign of the evolving economic landscape, with real consequences for growth, investment, and employment.
South Africa’s (SA’s) post-apartheid dream of a prosperous nation remains unrealised for many. While political freedom was achieved in 1994, economic freedom and opportunity have lagged. Poor leadership, particularly in government, is a key cause of this. A lack of accountability has resulted in flawed policies that hinder economic progress, leaving millions in poverty.
In a small corner of Europe, Scandinavia has built economies that many around the world envy. Meanwhile, South Africa (SA) faces a different set of economic challenges. While the two regions differ in size, population, and history, lessons can be learnt from the successes of the Scandinavian model. The story of how these Northern nations created wealth and then successfully redistributed it can inspire us to chart a similar course in SA.
As the world eagerly anticipates the latest US jobs report, the stakes for the US Federal Reserve are exceptionally high. Investors are focused not only on the numbers but on what they will indicate about the future direction of interest rates.
With growing expectations for local rate cuts, investors should consider the potential impact on their portfolios. Lower interest rates reduce the cost of borrowing, stimulating economic activity and boosting consumer spending. However, it also reduces the return available on savings. Although just one of the factors impacting asset returns, rate cuts typically prove negative for cash investors while benefitting bonds, equity, and listed property.
In the quietness of a summer week, when even the most steadfast analysts are on vacation, one might assume that the economic world would stand still. Yet experience tells us that it is often in these calm moments that the most significant events unfold, unnoticed until they shake the markets.
As July came to a close, the economic mood in the US shifted dramatically. A surprising surge in retail sales, rising 1% (the largest increase in a year and a half), sparked a rally on Wall Street.
This week we focus on the economic principles of market sentiment, interest rate impacts, and investor behaviour in response to central bank actions. Understanding these principles is critical when making investment decisions.
This week we focus on the economic principles of market sentiment, interest rate impacts, and investor behaviour in response to central bank actions. Understanding these principles is critical when making investment decisions.
