The Money Show | A year marked by significant global elections

In this podcast, Portfolio Manager Meryl Pick, shares her thoughts on the interesting dynamics at play in 2024, a year marked by significant global elections. She highlights the unique behaviour of the dollar, which often strengthens during times of market panic as investors seek safety in US government debt and assets like treasury bills and gold. Meryl also points out that despite the volatility, South African consumer-facing companies remain attractively priced compared to their global counterparts. This makes them appealing to investors looking for opportunities amidst the market fluctuations.

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Transcript

Mateo: We're going to be looking at the markets today with Meryl Pick and just have her walk us through what has been happening in the markets in the past few days Meryl, welcome again to the money show. I don't want to touch too much on Trump, but how does sentiment like this, like an attempted sewer, an attempted assassination, rather, affect the markets?

Meryl: Good evening. Mateo, good evening to your listeners. 2024 is proving to be an interesting year, given all the elections happening around the globe, and clearly, it's making South African elections, in hindsight, look a little bit mild, we would say. The interesting thing about the dollar and the idea that it's the world reserve currency, it behaves in unique ways compared to currencies of any other country. And the dollar wins when America wins, and sometimes the America the dollar wins when America loses, because if the world becomes afraid at a time that America loses, that flight for a safe haven, finds its way into assets like treasury bills or gold. And so actually, in times of market panic, the dollar strengthens because people seek safety in US government debt. So it's paradoxical I know but this is often what we see at times of extreme panic. Yeah, dollar strengthens for no other reason than people are fleeing to safety.

Mateo: Well, at least you've walked us through it, because I've been trying to get my head around it to say What a weird event to move markets. But it did. I mean, early on, when I was reporting on the JSE, it was in weaker territory, about 30 minutes away from market close, but at five it had posted a late, late rally that saw financials up more than 1% with the OSHA up more than a half a percent today. Can you explain what boosted the market so late in the day?

Meryl: Yeah. Look, it's unclear. It could be just taking advantage of some price weakness. We also obviously saw quite a strong day for precious metals. And you know that one makes more sense in the context of an attempted assassination on a presidential candidate in the US, seeing gold edging towards 2500 makes sense, and that's driven the gold names, um, at the end of the day, the financials of and many other retail companies. SA consumer-facing companies are still exceptionally attractively priced compared to their comparatives in other markets, so it makes sense that investors would look for an opportunity to add.

Mateo: Well, that was Meryl Pick going through these weird times on the market. Portfolio Manager at Old Mutual Investment Group.