๐๏ธ Worldwide Markets โ Episode 662
๐
21 January | Recorded Tuesday afternoon
Host: Simon Brown
Powered by: Standard Bank Global Markets & Shyft โ the global money app for travel, shopping, payments & investing ๐๐ณ
๐ช๏ธ Wild Markets This Week
A full-throttle return after the festive break, with markets grappling with politics, power, commodities and currencies โ and a reminder that who runs the Fed still really matters.
๐๏ธ Why Jerome Powell Matters
Jerome Powell is under political pressure โ and that pressure is very deliberate.
- ๐บ๐ธ Powellโs term as Fed Chair ends in May, but his FOMC seat runs until 2028
- Donald Trump wants Powell out completely, not just stepping down as chair
- Why? Powell still carries huge gravitas around the FOMC table
- Trump wants control of interest rates โ history (hello Turkey ๐) shows why thatโs risky
- The legal action against Powell creates a chilling effect on public service
- ๐ฎ Prediction markets now see a higher probability Powell stays until 2028
๐ Bottom line: this isnโt about renovations or budgets โ itโs about who controls monetary policy
๐ How the FOMC Really Works
- ๐ณ๏ธ 12 voting members
- 5 regional Fed presidents (NY always, others rotate)
- 7 presidential appointees (14-year staggered terms)
- Trumpโs strategy is clear: reshape the 7 appointees
- Stephen Miranโs term ends soon โ a key opening for Trump
- Powell staying on = continued institutional resistance
๐ง Trump Tariff Bluster: Scary, Thenโฆ Not So Much?
Tariffs have been Trumpโs weapon of choice โ but markets are adapting.
- ๐ One year into Trumpโs term, three to go
- Tariffs shocked markets on โLiberation Dayโ (2 April) and early Canada/Mexico threats
- Yet:
- ๐จ๐ณ China posted a $1.2 trillion trade surplus
- US tariff revenue rose from ~$80bn to ~$240bn
- Costs are being shared: exporters, importers & consumers
- The feared Smoot-Hawley repeat hasnโt materialised
โ ๏ธ New concerns:
- ๐ช๐บ Tariff threats on EU countries
- ๐ฉ๐ฐ Greenland rhetoric spooking markets
- ๐ US futures pointing sharply lower (as of recording)
โก๏ธ Markets are learning to look past the noise
๐๏ธ Davos: Does It Even Matter Anymore?
Once market-moving, now more theatre than substance.
- Big threats, big statements
- Very little follow-through
- Markets increasingly treating it as background chatter
๐ฅ Gold: The Real Winner
Gold continues to shine โ and central banks are the key.
- ๐ Gold rebounded from sub-4000 to ~4730
- Central banks have effectively put a floor under gold
- Dedollarisation is real
- ๐ฏ 5000 gold no longer sounds crazy โ possibly first half of the year
โ๏ธ Gold Miners
- Profits set to double in 2025 vs 2024
- AngloGold Ashanti*:
- ~R500 in March last year
- ~R1000 by September
- ~R1600 now ๐
- Massive dividends likely, even if prices donโt triple again
๐ฟ๐ฆ Rand Strength: Not Just Dollar Weakness
The rand is having a moment.
- ๐ฑ Broke through 17, now around 16.40
- Drivers:
- ๐บ๐ธ Weaker dollar (DXY down from 108 to sub-100)
- ๐ Foreigners buying SA bonds
- ๐ญ Precious-metal exports converting USD back to ZAR
- Equity flows still net sellers โ but nibbling is visible
๐ฉ PGMs on Fire
Platinum group metals had an epic festive season.
- โช Platinum
- Broke key resistance levels
- Trading ~2300
- Supply deficit emerging
- ๐ต Palladium
- Back above 1800
- Demand steady as stockpiles clear
- ๐ฏ Sibanye-Stillwater* remains a compelling play
๐ข๏ธ Oil: Venezuela Isnโt the Silver Bullet
Oil price action has been volatile, but reality matters.
- Brent dipped below $60, then spiked above $66
- Venezuela:
- Only ~1% of global supply
- ~4% of heavy sour crude (more important)
- Infrastructure is broken
- Exxon calls it โuninvestableโ
- Billions needed before meaningful supply returns
- Great piece by Casey Sprake.
๐ Not all barrels are equal โ economics matter
๐ Cristal Challenge Is Back
A JSE classic returns.
- Hosted by Sasfin
- Pick 5 JSE-listed shares (no ETFs)
- ๐๏ธ Entries close 31 January
- Simon will reveal his picks next week
๐ฌ Get in Touch
Got thoughts, feedback or ideas?
- ๐ฆ Twitter/X: @SimonPB
- ๐ Website: simonbrown.co.za
- ๐ง Email: simon@justonelap.com
๐ Thanks for Listening
Normal service is back.
As always โ look after yourself, and if you can, look after someone else too โค๏ธ
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Wednesdays are all about hard-core investing and trading with Simon Brownโs WorldWide Markets podcast (previously JSE Direct). JSE Direct started life on ClassicFM in July 2008 and became a podcast in 2011. Every week Simon shares his views on the state of global economies, individual shares and events moving markets.
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