Eben Visser

As we move into Q4, our outlook is marked by both caution and opportunity. In the US, equity markets appear highly valued, with price-to-earnings (P/E) ratios exceeding their long-term averages. While the AI technology boom has been a significant driver, there are concerns that some of this enthusiasm may have led to overextended valuations. Additionally, there is uncertainty surrounding US recessionary fears, as we await economic data that will indicate whether the Federal Reserve has acted in time by cutting rates in mid-September 2024.

This uncertainty is further exacerbated by the upcoming US election, which could significantly impact the US-China relationship. Tensions between the two countries over trade, technology, and geopolitics could lead to new policies affecting import and export flows, potentially disrupting global supply chains. The outcome of this election may either strengthen or weaken these ties, influencing broader market sentiment.

On the South African front, the outlook is more optimistic. The newly established Government of National Unity (GNU) has sparked a wave of cautious optimism among investors. South African assets are attracting attention as risk appetite increases. However, much hinges on the ability of the GNU to deliver on its promises, especially in terms of policy reforms. Investors are hopeful but remain vigilant, awaiting further developments.

In this mixed environment, diversification remains crucial, and our portfolios are positioned to navigate both global uncertainty and local opportunity.