After the news last Friday that the US economy created many more new jobs (220000) than expected (180000), most investors and analysts believed that the changes for a cut in the bank rate by the Fed later this month seemed unlikely.
The release of gloomy trade data for China on Friday also did not help.
In reaction to the better-than-expected job numbers in the US, shares on the JSE took a tumble last Monday and Tuesday and the ALSI on the JSE lost 626 points or 1.1 percent, trading at levels lower than 57000.
This was more than 2000 (3.4 percent) points lower than the 58973 that was reached a mere three weeks ago on July 20. The testimony by US Fed chairperson Jeremy Powell in front of the Senate last Wednesday had changed market sentiment completely round and optimism of a cut in 10 days now prevails. Domestically it was announced that the current governor of the Reserve Bank, Lesetja Kganyago, will serve for another five years. These two “news” items not only saw the rand exchange rate dipping under the R13.80/$ level (around 30 cents lower than the previous week) but pushed the ALSI up again by 661 points (1.1 percent) to 57597.