LOCKDOWN LEVEL 1 Ver3 [ DAY 35]  

TOTAL DAYS 404 – 7 HOURS 35 MINUTES

Vaccine rollout day 91 / J & J VACCINE DAY 79

By the close of trade on Monday 3rd May 2021, the South African rand strengthened against the US dollar.  In SA the shocking news of an Indian traveler arriving in SA and tests positive in Durban sparks fears of a new variant and rise in numbers has a 3rd wave on their minds as positive test case numbers rise.  In the ESKOM debacle the wave of dodgy tender deals is in the spot light to the tune of R178,000,000,000.00 in an elaborate scheme of kickbacks used to buy inter alia, cars, properties, houses.

  • In the US, the Federal Reserve (Fed) Chairman, Jerome Powell stated that the US economy is doing better but it is “not out of the woods yet”. Also, the New York Fed Bank President, John Williams stated that fiscal support, along with vaccinations, is helping the US economy to recover, but it is unlikely that the boom will lead to inflation that is unsustainably high.
  • A major investment deal reached in December between the European Union and China after seven years of painful negotiations may end up being the high-water mark for ties that are quickly deteriorating again. Since then, the EU’s executive branch and Germany have each formulated legislation that would make life harder for Chinese entities to invest, while joining the U.S. in swapping tit-for-tat sanctions with Beijing. Italy’s government has turned from an enthusiastic backer of President Xi Jinping’s Belt and Road Initiative to blocking planned acquisitions by Chinese companies.
  • The United States set another record for the number of air travelers since the pandemic set in, although passenger numbers remain far below 2019 levels. Nearly 1.67 million people were screened at U.S. airport checkpoints on Sunday, according to the Transportation Security Administration. That was the highest number screened since March 12 of last year when air travel began to plummet. However, it was still 35% below the number of airport travelers reported on the comparable Sunday in 2019, according to TSA figures.
  • Warren Buffett and Berkshire Hathaway (BRKB) vice chairman Charlie Munger are not big fans of short-term trading and the popular Robinhood app. But it appears that Robinhood has no time for Buffett or Munger either. Buffett said in Saturday’s annual Berkshire Hathaway shareholder meeting that the rise of Robinhood is “a very significant part of the casino aspect” of the stock market in the past year. “There’s nothing illegal about it, there’s nothing immoral. But I don’t think you build a society around people doing it,” he said. Buffett is not a fan of the company’s business model, he added.
  • Melinda Gates described her marriage to Bill Gates as ‘irretrievably broken’ in a divorce petition which revealed she and the Microsoft founder, who is the fourth richest man in the world with a fortune of about $130billion, did not sign a prenuptial agreement. Bill, 64, and Melinda, 56, announced their split after 27 years of marriage via Twitter on Monday. Court documents showed the couple do not have a prenuptial agreement to help them navigate dividing their wealth  which includes properties in five states, a private jet, an astonishing art collection and a fleet of luxury cars.
  • On the data front, the ISM manufacturing activity grew at a slower pace in April, restrained by shortages of inputs as rising vaccinations against COVID-19 and massive fiscal stimulus unleashed pent-up demand.
  • Domestic vehicle sales increased by more than 6,000.0% on an annual basis in April, 12 months after the Covid-19 hard lockdown brought the market to a virtual standstill.
  • Meanwhile, the Absa Purchasing Managers’ Index (PMI) fell for the first time in four months in April, though the indicator remained in positive territory.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.27%. Further, the yield on 2023 bond declined to 4.63%, while that for the longer-dated 2030 issue fell to 9.22%.
  • Later this week Moody’s will have another release on SA’s rating.

In early trade on Tuesday, the US dollar is trading higher against the South African rand at R14.4422, while the euro is trading higher at R17.3872.  The British pound has marginally declined against the South African rand to trade at R20.0425.

By the close of trade on Monday 3rd may 2021, the euro declined against most of the major currencies.

  • German retail sales posted their biggest year-on-year increase in March since the start of the COVID-19 pandemic, as the relaxation of some lockdown measures boosted purchases. Further, a surge in demand for exports pushed activity in Germany’s manufacturing sector to a 36-month high in February, while lockdown measures to contain the coronavirus pandemic pushed the services sector into a deeper contraction.
  • The eurozone factory activity growth reached a record high in April, boosted by surging demand, driving a swell in hiring although supply side constraints led to an unprecedented rise in unfulfilled orders.

In early trade on Tuesday 4th May 2021, the euro has slipped against the US dollar to trade at $1.2072, while it has gained against the British pound to trade at GBP0.8726.