Shapiro: SA economy falters; US tech boom lifts markets after Trump inauguration
David Shapiro from Sasfin offers his perspective on the current market landscape, touching on global trends, political shifts, and local performance. He highlights key sectors and shares a cautious outlook on future developments, as uncertainty continues to influence both local and international markets.
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Edited transcript of the interview
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Bronwyn Nielsen (00:01.467):
David Shapiro from Sasfin, we've got so much news flow right now on the political front, with the new US administration and markets reacting. Can you give me a sense of what you're seeing on the ground and how you're positioning?
David Shapiro (00:17.426):
Look, businesspeople and even countries are generally very positive about what this means for the global economy and are responding in a positive way. The big drivers, the things that have influenced the market, are that we expected him to introduce tariffs right away, but he scaled back on that. They're more threats than actual impositions at this time. So, the dollar's come off the boil, which is good for us, and it's also good for markets.
Another factor is the increased attention on artificial intelligence and developing technology. The question remains whether these proposed infrastructure funds will ever come to fruition, given how incredibly huge the numbers are. I'm not sure where they'll find the money. We also see figures like Mr. Altman and Mr. Trump battling it out for dominance—not Mr. Musk, though!
The bottom line is that it's giving markets a lift, and we've seen some very strong gains in the US, particularly leaning toward tech. For example, the S&P is already up 5%.
Bronwyn Nielsen (01:25.417):
There's so much debate, David, about the influence of tech billionaires on US politics. They were there in full force—if you can call it that—at the presidential inauguration. Do you think this is an undue influence on US politics?
David Shapiro (01:44.654):
Well, that's US politics. I don't think it's anything new. This has been happening for generations. They certainly don't want to upset Mr. Trump because he can be incredibly spiteful and hateful, and who knows what the consequences might be? Even Zuckerberg, who is a deep critic, was there smiling, shaking hands—everyone was like that.
I just take it in stride. This is who Americans are. The rich get richer, and they help build out the nation. Sadly, I think other countries are falling behind. Europe is staggering, the UK is struggling, and even emerging markets are battling to figure out what to do. So, I look at it, take a step back, and think, "Okay, this is where we've invested. Let's just enjoy the ride without getting emotionally involved," because that can really eat you up inside.
Bronwyn Nielsen (02:47.177):
Definitely don't want to be eaten up inside, David! Let's talk about the South African market and how stocks are responding. Are they moving in tandem with global markets, particularly the US?
David Shapiro (03:00.588):
Not really. We're lagging a bit. The one area that is picking up is Richemont, which has been quite strong. We've also seen gold shares performing well. But beyond that, we're watching China closely, and we're getting mixed signals. We're not quite sure how to respond to that yet.
The commodity markets, which should benefit from what Trump is doing—rolling out big infrastructure projects and technology—could create demand for copper, which should support our commodity companies. Plus, his stance on fossil fuels should help platinum prices. But, so far, we haven't seen a strong response.
Another area of concern is that last year, we had a good year with banks and retailers, but this year they seem to be slowing down. Share prices ran ahead of the underlying results, so I think there's a bit of a mismatch. Even though companies like Mr. Price and Clicks have come out with decent results, the market has been slow to respond.
Bronwyn Nielsen (04:26.165):
Well, David, we'll catch up with you again soon. Thanks for the update on both local and global markets. David Shapiro from Sasfin.
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