You're listening to Strictly Business Podcast with Lindsay Williams.
JSC has closed its doors for another day, so it's time for the 5 o'clock shadow.
And as always on a Wednesday, I speak to Skulk Lowe, Portfolio Manager at
PSG Wealth Old Oak Division in Cape Town.
We didn't speak last week, Skulk,
and you mentioned to me off-air that you'd been out of contact because there had been
some
glitch, some technical glitch in the place that you were.
and you were a couple of days offline.
And sometimes during these times that we're experiencing at the moment, that's a
very good thing, I would imagine.
It allows you to collect your thoughts.
Yeah, it was the strangest feeling.
I mean, people usually tell you, oh, it's going to be blissful.
There's no signal.
There's nothing there.
And the first few hours, I must admit,
especially in the times we're living in wars and...
tacos and all those things um we i i found it strange i didn't know what to
make of it and then i just switched off and um yeah it's been been in the middle
middle of the
crew saw
stars as big as the moons and the moon as big as the sun it was just it was just
fantastic the
quietness and i would really encourage all the listeners to just maybe i've heard
that there's there's different
means of fasting.
You know, you've got a water fast.
You've got, I saw one the other day, a sardine fast where you just eat sardines.
But the one that I've heard as well is internet fasting,
to take yourself off internet and social media.
And I would highly encourage it.
I was forced into it, but loved every second of it.
I don't see as much of a faster, actually.
You can talk about sardine fast and grape fast as much as you like.
A fast is when you don't eat anything.
That's why it's called breakfast, break fast.
Exactly.
I see more as a whiskey and red wine fast myself.
But that's another matter, Skunk.
Can we talk about markets since you've been back?
First day of world peace.
Let's talk about that.
It's a big day, and it's the first day of world peace.
Thanks, Donald Trump, for doing that for us.
And I noticed that markets are reacting very nicely to what he said.
But of course, we know it's a lot of rubbish and it was people that were short
of the market
buying back the stock indices and the stocks themselves and every other
instrument that they sold.
So that's sort of exaggerated the move.
We know that every single market that's done more than it usually does has been
affected by that.
But we also know that it's not going to last because of the erratic nature of the
gentleman that I just mentioned earlier on.
I mean, we saw crude oil down 18 percent at one stage, the biggest move.
for I think about two decades and now it's only down 13%
only and we're grateful for it but still it has recovered.
Skull, can I see it doing so again?
This is the pattern.
It's a well-worn pattern five weeks in.
Yeah, what a day.
I mean, yeah, a few people asked me today, you know,
what do you do now?
I mean, what do you actually do?
Do you follow this?
Is this not time to be buying?
Do you use this dead cat bounce and actually go and sell?
What do you do?
It's a fair question.
Yeah, exactly.
And yeah, when in doubt, just do nothing.
Just do nothing.
Really, you can't see this type of movement.
I mean, it's totally erratic.
I told my team this morning, it really feels like watching a very bad, I mean,
seriously bad, B-rated war movie.
It's, I mean, I can't believe that this is real life.
We've been desensitized, haven't we?
We expect it now.
And when it happens, you say to yourself, did the President of the United States say
that the F word?
in a tweet at two o'clock in the morning.
Did he say he's going to obliterate a nation?
What was the word?
A civilization.
Yeah, a civilization.
Did he really say that?
And you think, oh, yes, he did.
And you get on with something else, feeding the cat or something.
It's astonishing the way that we just let it wash over us and that no one does
anything about it.
Yeah, we, through the F-bomb, you know, we're lunatics.
I read that.
I got back.
back into civilization.
And I read that.
My first reaction was, it's one of these parody accounts.
That must be one of these parody accounts.
No way can the...
President of the largest economy in the world of this type of tone.
I mean, you always, when I say certain words or names,
you've got a certain idea of that word.
If I say James Bond, what immediately springs to mind?
Me, first of all, but you know what I mean.
I know.
A suave secret agent working for MI5. Or is it MI6?
Anyway, I know what you mean.
There will be a suit.
There will be welcomed here.
This will be suave.
This will be shaken and definitely not stirred.
When you say the President of the United States, POTUS, I mean,
I know we're laughing now, but this is never, I mean, anyway.
Let's not go down this rabbit hole.
We're sitting in an environment where now there's a 10-point plan coming from Iran,
there's a 15-point plan.
And my thought when I saw this,
let's call it a tweet this morning, is Iran has won.
They won.
Because let's say now they sit around the table and let's say, well, we need to chat
about these 10 points.
So what's the ten points?
I'm not going to go through all of them.
But first point, no more war.
No more shooting, no air.
That's reasonable.
To end a war, you need to stop war.
Are these the points that the U.S.
and Israel are imposing upon Iran, or is it the other way around?
No, no, I'm talking about Iran.
Iran's saying that they will settle.
This is the ten things that they want.
Okay, go on.
And, you know, other point.
We will need two million dollars for each ship that goes through the Strait of
Hormuz.
I mean, wow, that's going to be some year-end function party.
Man, with all those two million dollars.
There's about 150 to 160 ships that used to go through the Strait of Hormuz when
world trade was, you know,
doing pretty well, whether it be fertilizer or oil.
So let's say it's a hundred.
That's two.
That's 200 million a day.
That's not bad.
That's not bad just for sitting there and waving a ship through.
Correct.
So that'll definitely be a great injection for the Iranian GDP. Then next point,
no more U.S.
sanctions.
Now, I mean, that's most probably been
Iran's biggest ball and chain for the past, how many years?
47 years.
Yeah, I know.
Because, I mean, they are an oil-producing country.
More than 50% of their GDP is made up just out of oil.
And they had these sanctions.
If they didn't have these sanctions, they would have done a hell of a lot better.
No more sanctions.
So I'm looking at this and say, yes, they've got blown up.
There's a lot of work to be done when this war is done.
But if...
that's going to be the outcome.
That's going to be, okay, we can work with these 10 points.
Now you need to look at our 15 points and let's meet each other in the middle.
And of course they won't meet each other in the middle because Trump is on the one
hand and he doesn't like to concede one point,
let alone seven out of the 15 he's going to impose upon them.
And so it's not going to happen.
And that is why you should be buying oil at the moment and going against everything
you've seen in the last two or three hours as we record this
end of the market stay.
podcast.
That's my opinion, not the opinion of PSG Wealth and Scout Clow.
Now, Scout, we've gone on enough about Trump because you could do it till the
cows come home.
People do it a lot better than us.
Yeah, go on to your final point.
Because I had a chat with I don't know if you had David on the show yesterday.
I haven't had him since he's been back from the States, but anyway.
That's what I'm asking because he's still got very...
Very, very heavy jet lag, but he's back.
And I had a chat with him today, and I said, well, just tell me, general
thoughts, what's the I mean, you just came back from the States.
Yes, you stayed more on a let's call it the eastern side,
more blue states.
It's Boston and New York, and that's not America, as we know.
Correct, correct.
But what's the general I mean, you've been there.
What's the general trend?
What's the general feeling?
He says, Skog, it is unbelievable how the people,
the US citizens are turning against Trump.
You can feel it.
You can actually see it in the people's reactions and what's
happening there.
So I hear what you say that they won't meet each other in the middle.
I wonder if we're not going to have a
25th amendment impeachment coming along before then.
Congress hasn't even gathered, so that's not going to happen.
And the extraordinary thing is that because of the magic of television and
so-called charisma and the litany of lies,
77 million people voted for this freak.
And it's really strange.
I watch Jimmy Kimmel every morning and I think I'm in a bad mood when I wake up
about Trump anyway, but then you get the Jimmy Kimmel
15 minutes condensed of his show the previous night that he's just recorded and
you think, goodness me,
this bloke is clever the way he phrases things, the way he puts things,
the way he puts a bit of a humorous spin on it, very humorous spin on it,
but what he's saying is terribly, terribly important.
And what I love about Trump...
is that even when he's dead, which will be soon, it'll still go on.
People will say, well, this happened and that happened.
There'll be analyses galore on every single television station.
Skunk, let me tell you about gold quickly, because it's one of your favourite
subjects.
And that is that all the safe haven buying has been done.
It's all discounted.
It was done over the last two years.
It was done by the central banks for very, very different reasons, as a store of
reserve,
as a complement to the US dollar.
But the safe haven buying as well has stopped now.
And it's a dollar proxy.
It's as simple as that.
The dollar goes down, which it has in the last few hours because of what Trump has
said.
And the gold price went up and now it's coming down a bit as the dollar
strengthens a bit.
It's going tick for tick with the Dixie, the dollar index.
Yep.
And what Lindsay is saying for the listeners is when you look at the Dixie,
the US dollar index.
that is down 1% today.
And when we look at the gold price, that is up 1% today.
So, yeah, you're 100% right.
And that's good to a certain extent because there was a definite decoupling.
I mean, we've had the run-up to the actual war, but we also had prior to the run-up
to the war,
we had the Greenland saga, we had Venezuela saga, we had a few other sagas.
And I think those sort of catapulted gold way before the actual events.
the actual war.
But you're right.
I think you get a feeling now that when the war actually broke out,
I think the biggest surprise to me was not that gold retraced because it was sort of
a
buy-in rumor, sell-off fact, but how the people actually just ran to the dollar
again,
how the dollar just became the safe haven.
But, yeah, I think you're 100% right.
But maybe…
There's a hidden message for us in Trump's true social
tweet that he sent out this morning.
Did you read that final part?
He said, this could be the golden age of the Middle East.
He throws gold around a lot.
Anyway, but I think, like you said, let's move along.
I do think that you're right.
I think there's definitely a more natural.
movement in gold these these let's call it past week week or so and and
i think that's a good thing it's it's the gold price is still trading uh four
thousand seven hundred fifty odd dollars i mean
that's that's really good i mean a lot of people mentioned
that well there we go gold is going back all the way to three thousand three
thousand five hundred dollars yeah we're sitting it's still still
trading four thousand because the the globe the The
investors out there still realize that the major issues is, one, inflation.
Going forward, inflation is going to be a major issue.
Are we going to see the world going into a recession, which I think could still very
much happen?
And all those things play to the advantage of gold, keeping some value.
So, yeah, I'm really happy with the gold's movement.
And, yeah, look at the gold shares today.
Wow.
Yeah.
I was going to say that actually before we finish the gold subject.
Can you tell me how they've behaved while gold has been so volatile?
And also, don't forget, mired below $5,000 an ounce, which before we saw as support.
Yeah, yeah.
Yeah, I mean, the gold shares did phenomenal.
I mean, yeah, retrace a little bit, a lot apart of today, but
Anglo Gold still in the day 4.8% higher.
When we look at gold fields, that was close to 5%, 4.7% for today.
Harmony, they brought out a, I think the results today actually came out,
or yesterday, sorry, results came out yesterday or so, that was up 4%.
In general, that was a nice little kicker coming from the gold shares.
And also, the other precious metal, PGMs did phenomenal today as well.
We'll come to that in a moment because I'm going to get on to the markets.
We have to do so.
Dollar round is 16.38.
Where else are we looking here?
British pound against the round is 22.01.
The euro round is 19.15.
Euro dollar is about 1.17 at the moment, was higher, the euro that is.
But we've got the gold price, the aforementioned.
4,754 on my slightly delayed screen, which is up 1.1%. We've got Platinum,
the first and the biggest of the PGMs.
2,057, up 5.6%.
But Palladium, it's a thinner market and it gets pushed around more and there's
less supply and everything.
But nonetheless, what a performance.
Up 9.5% to $15.95 an ounce.
Now, we're talking some real big moves here on the CRB index page.
I've got Brent crude oil now $94.88, only down 13.2% scalp and $94.90 now,
13.1%.
West Texas crude $95.62, down 15 and a third percent.
Natural gas down four and a third.
Gasoline down nearly 10% today.
It's gone down through $3 a gallon in the United States.
So that'll please a lot of people.
Other ones, oh yes, copper, of course, $5.75 in New York, which is three and two
thirds percent higher.
I was looking at all sorts of other things.
I looked at live cattle, of all things, and I thought, what other commodities are
either doing well or doing badly?
Live cattle have gone to record highs this year, and I think it's because of
feedstuffs coming through the straight of all moves.
I think so, Skulk.
You're cleverer than me.
You'll be able to confirm or deny that.
But a lot of commodities have done well, and that leads me to the CRB index.
How many weeks ago was it?
We were saying, well, it's just broken 400, and you looked it up, and the high
was 425 on this particular index.
That wasn't that long ago, was it?
Yeah,
and I still highlighted the fact that we've still got
some running to do to get to the previous highs.
And man, that didn't take long.
Nah, sliced through that like a hot knife through butter, and it's now 483 almost.
Record highs.
Tomorrow it'll be much lower because they only calculate the index in the morning.
So it'll be much lower because of the oil price substantially.
So it'll be 10% down at least.
But nonetheless, let's enjoy it while we're looking at a screen that says
482.71.
South African 10-year bond yield 8.52%.
It's recovered sharply.
I remember looking at it just three or four days ago at 9.20%.
So yields falling in South Africa.
Bonds going in the other direction.
US 10-year, that's another one.
Was in the 440s a couple of weeks ago, now 4.27%.
S&P 500 futures, the dead cap bounce is just coming off a little bit.
But nonetheless, 2.1% higher at 6,796.
That's for the June futures.
One more thing I've got to give you, and that is the Bitcoin price, which is
benefiting from the weaker dollar.
71,150, which is up 4.4% on the day.
Anything else you want to talk about, Scott, before we go to the ups and downs
on the JSC?
Any themes since we spoke?
No, I think your call was 100% right.
I mean, it was a broader market movement where if you,
let's call it produce or salt, anything other than oil or energy-related,
Then you had a fantastic day.
If you did the former, then you had a very, very difficult day.
So yeah, there was no real news out.
Yeah, very, very good day.
Nice recovery in the market for today.
Impala Platinum is top of the list on the JSC on the close.
13% higher, just over 13% higher.
Right behind the big one, the ex-Anglo-American Platinum division,
Valterra, up 9.2%.
Pepcor, why is Pepcor up 9%?
Come to that in a moment.
I don't know what ATT is.
What is ATT?
What is the symbol ATT for a stock, Skalk?
I should know this.
Let's quickly have a look.
It's a tech, if I'm not mistaken.
Yeah, it's a tech.
I'm guessing now, but it's a property counter, a tech.
Okay, 8.6% up for the ridiculously named property counter.
Yeah, it is a tech.
And GrowthPoint as well, which is another not so ridiculously named property
counter, up 8.1%.
So something happening there probably to do with the bond market.
On the downside, horrible for Tungela.
That's got to be the most volatile stock of the year so far.
down 12.5%, Sassl down 12.3%, down below 200 now,
199, Sun International down 3%, Carew down 3%,
and British American Tobacco a 2.8% loses.
Outside of those big ones, Skalk, any small or medium caps?
No.
No, and just quickly, the Sun International, the only one there is XDEF
Stories, but the rest is all retracements.
No, I think it's been a great day.
And just by the way, you mentioned the CRB commodity index.
I looked the other day.
I think it's about 35%.
35% of the CRB commodity index is energy-related commodities.
But I think some of these other harder commodities, the golds, the silvers,
those will definitely help ease in.
But you're right.
I think we will have a bit of a retracement in the CRB commodity.
Probably around 4%, 5% tomorrow, yeah.
Anyway.
It's not over yet.
Skulk, thanks so much for your time as always.
Skulk Lowe is a portfolio manager at PSG Wealth Old Oak in Cape Town, and that was
the 5 o'clock shadow.
The views and opinions expressed in these podcasts are those of Lindsay Williams and
various contributors and do not reflect the policy,
position, or opinion of any other agency, organisation, employer,
or company associated with StrictlyBusinessPodcast.com.
Assumptions made on the analyses are not reflective Thank you.
of the position of any other entity other than the speaker or the author.
And since we are critically thinking human beings, these views are always subject to
change,
revision and rethinking at any time.
Please do not hold us to them in perpetuity.