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Business Description: A holding company, which engages in the manufacture and distribution of packaging and paper products. It operates through the following segments: Corrugated Packaging, Flexible Packaging, Uncoated Fine Paper, and Corporate. Recent Developments Sold Russsian operations Agreed to acquire Hinton Pulp mill in Alberta, Canada from West Fraser Timber Co. Ltd for USD 5 million In this note, I consider 7 charts that may put into context the fundamental valuation of the group. Data Source: TradingView Earnings Per Share. Steady Growth Over Several Years Return On Invested Capital. The steady upward trend reflects improved capital allocation. Free Cash Flow % Margin Debt-To-Equity Ratio. Near multi-year lows. Price-to-Book Ratio. Lowest since 2012. Further signs of fundamental appeal? Price-to-Sales Price-to-Earnings. At the cheaper end of it's multi-year range.

VIEW RETAINED: MATURING WEDGE PATTERN UNFOLDING The long-term P*Z* wedge pattern seems incomplete with further possible overlapping A,B,C and W,X,Y phases, as illustrated. The A,B,C bull phase off S1 has completed the expected B phase within the R1/S0 range. Phase C should now target line P*. Potential for a bearish reversal at P* will activate the final W,X,Y downside to Z*/S1 cluster support. A long-term bottom around Z* is expected to initiate a multi-year impulsive bull trend to R3 and R4. Any definite break of P* will signal the end of the P,Z bear phase and activate the bull trend to R3/R4. Target and Re-assessment Levels: Negation Levels: P* and Z* Primary Trend and Target Levels: Overlapping downside to S1/Z, followed by gains to R3/R4 Prevailing Trend and Target Levels: Gains to P* Technical Rating: Medium to high https://www.unum.capital/research-disclaimer

VIEW RETAINED: MEDIUM-TERM CONSOLIDATION The expectation of a 1,2,3,4,5 impulsive bull trend to RA1, followed by a W,X,Y correction to S1*, has materialised. The test and reversal from S1 has completed the initial phase of the bearish correction. The current outlook is for medium-term consolidating price action to occur within the highlighted range. This price action can be contained within the R0/S1 range OR can extend downwards to the now pivotal S2* level. A number of alternative formations could still develop. If S2* holds, a very bullish outcome would be for impulsive upside (i ii iii iv v) to new highs. Target and Re-assessment Levels: Important Levels: S2* Primary Trend: R0/S2* consolidation, followed by a bull trend to R2 and beyond. Monthly Range: R0/S1 Current Trend and Target Levels: Downside towards S1 Technical Rating: Medium https://www.unum.capital/research-disclaimer

VIEW RETAINED: ONGOING 66500 to 73800 CONSOLIDATION PRICE ACTION The general view of a P*Q* defined protracted consolidation phase remains valid and has been confirmed by recent price action The current downside should target Q*, as part of the ongoing range trading (A,B,C,D,E). An eventual bull trend to T1 and T2 remains preferred. The interim view of an upward correction from S0 is materialising and most likely still part of the phase C downside to Q and S1. The pivotal level for the illustrated bullish bias is at Q*, while a break of P* will activate the gains to T2. Target and Re-assessment Levels: Important Levels: P* and Q* Primary Trend and Target Levels: P*/Q* ranging, followed by gains to T1 and T2. Monthly Range: R1/S0 consolidation Prevailing Trend and Target Levels: R1/S1 Technical Rating: Medium https://www.unum.capital/research-disclaimer

Introduction In the world of share trading, understanding correlation is vital for making informed investment decisions and managing risk effectively. Correlation plays a crucial role in assessing how different shares or assets move in relation to each other, providing insights into portfolio diversification, risk management, and potential investment opportunities. We will explore the concept of correlation in share trading, its importance, and how traders and investors can leverage this knowledge to improve their strategies. What is Correlation in Share Trading? In share trading, correlation refers to the statistical relationship between the price movements of two or more shares or assets. When two shares have a positive correlation, they tend to move in the same direction – when one share's price increases, the other share's price also increases. On the other hand, a negative correlation indicates that two shares tend to move in opposite directions – when one share's price increases, the other share's price decreases. Finally, if two shares have a correlation close to zero, it suggests that their price movements are not significantly related. Measuring Correlation in Share Trading The most common method of measuring correlation between two shares is by using the Pearson correlation coefficient, just like in general statistics. The correlation coefficient ranges from -1 to 1, with the same interpretation as before: r = 1 indicates a perfect positive correlation, where the two shares move in complete harmony. r = -1 indicates a perfect negative correlation, where the two shares move in opposite directions. r ≈ 0 indicates little to no correlation, suggesting that the two shares have independent price movements. Importance of Correlation in Share Trading Understanding the correlation between different shares is crucial for several reasons: Diversification: Correlation helps traders identify assets that have low or negative correlations with each other. Diversifying a portfolio with assets that are not highly correlated can help reduce overall risk. When some assets decrease in value, others might increase, which can mitigate losses. Risk Management: High correlations among shares can increase the overall risk in a portfolio. If all shares in a portfolio are positively correlated, they are more likely to experience simultaneous declines during market downturns. By knowing the correlation between holdings, traders can optimise their portfolios to manage risk more effectively. Identifying Investment Opportunities: Traders can use correlation analysis to identify potential investment opportunities. For example, if they notice a positive correlation between two shares, they might consider one as a proxy for the other. If the correlation is negative, they may see a hedging opportunity to protect against price declines. Sector Analysis: Correlation analysis can help traders understand the broader movements within specific sectors or industries. For example, in a technology-heavy sector, many shares might be positively correlated, and understanding this can influence investment decisions within that sector. Limitations of Correlation in Share Trading While correlation is a valuable tool, it has its limitations: Changing Market Conditions: Correlations between shares can change over time due to shifts in market dynamics, economic conditions, or company-specific events. Traders need to monitor correlations regularly and be prepared for them to evolve. Limited to Linear Relationships: Correlation measures linear relationships between variables. Some shares may have non-linear relationships, making it important to consider other forms of analysis alongside correlation. Causation Concerns: As always, it's essential to remember that correlation does not imply causation. Just because two shares are correlated does not necessarily mean that one share causes the price movement of the other. Conclusion In share trading, understanding correlation is a powerful tool for making informed decisions, managing risk, and optimising investment portfolios. By analysing the relationship between different shares, traders can diversify their portfolios effectively, identify hedging opportunities, and navigate changing market conditions more intelligently. However, correlation should always be used in combination with other forms of analysis, and traders must be cautious about drawing causal conclusions solely based on correlation. With a solid understanding of correlation, traders can navigate the dynamic world of share trading with greater confidence and success. Top 40 share correlation and selected markets The heatmap displayed below presents the constituents of the Top 40 index alongside selected major markets. This dynamic heatmap is updated daily, providing valuable insights. For added convenience, you can download the corresponding data as an Excel file. Stay informed of the latest trends and changes in the market through this user-friendly visualisation. Download the Excel file here: https://www.unum.capital/research-disclaimer

Introduction When it comes to investing in shares, it's crucial to be armed with the right tools and knowledge to make informed decisions. One of the most important metrics that investors use to assess the risk and return potential of equities is beta. Beta is a numerical value that measures the sensitivity of a share's price movements relative to changes in the broader market. We will delve into the concept of beta and explore its significance for share investors. What is Beta? Beta, often denoted as "β," is a statistical measure used in finance to quantify the volatility or systematic risk of a share compared to the overall market. The market, in this context, is typically represented by an index, such as the Top 40 index. The beta value indicates how much a share's price is expected to move concerning the market's movements. It helps investors understand how closely the share's performance is tied to the market's fluctuations. Interpreting Beta Values β = 1: If a share has a beta of 1, it moves in perfect correlation with the market. Its price tends to rise or fall by the same percentage as the market index. Such shares are considered market-neutral in terms of volatility. β < 1: A share with a beta below 1 is less volatile than the market. In other words, it is expected to have smaller price swings than the overall market. These shares are often referred to as defensive equities and are perceived to offer a more stable investment option. β > 1: A share with a beta above 1 is more volatile than the market. It tends to experience larger price movements, both upward and downward, compared to the market index. These shares are considered aggressive or growth-oriented investments. Risk and Return Relationship Beta plays a crucial role in determining the risk and return profile of a share. Typically, higher beta shares offer the potential for greater returns but also come with higher risk. Conversely, lower beta shares may have more modest returns but tend to be less risky and more stable during market downturns. For example, if Share A has a beta of 1.5, and the market (represented by an index) increases by 10%, Share A might be expected to rise by 15% (1.5 times the market return). Conversely, if the market falls by 10%, Share A could be anticipated to decline by 15%. How to Use Beta in Investment Decisions Diversification: Beta can help investors build a diversified portfolio. By combining shares with different beta values, investors can offset the risk of high-beta shares with the stability of low-beta shares. Risk Management: Beta assists in assessing the level of risk an investor is willing to undertake. Conservative investors might opt for low-beta shares, while those seeking higher returns might favour high-beta shares. Market Timing: Understanding beta can help investors make better decisions about when to buy or sell a share. During a bullish market, high-beta shares may outperform, while during a bearish market, low-beta shares may hold up better. Limitations of Beta While beta is a valuable metric, it does have some limitations: Historical Data: Beta is based on historical price movements, and the past may not necessarily predict future performance accurately. Market Conditions: Beta assumes that market conditions will remain constant, which is often not the case. Single-factor Metric: Beta considers only market-related risk and does not account for other factors like company-specific events or changes in industry dynamics. Conclusion Beta is a useful tool for investors to gauge the volatility and risk associated with a particular share relative to the overall market. It aids in constructing a well-balanced portfolio and managing risk according to individual investment goals and risk tolerance. However, beta should not be the sole factor in investment decisions, as it's essential to consider other aspects of a company's fundamentals and the broader economic environment to make well-informed investment choices. As with any investment analysis, it's prudent to conduct thorough research. Top 40 share beta and selected markets: The heatmap displayed below presents the constituents of the Top 40 index alongside selected major markets. This dynamic heatmap is updated daily, providing valuable insights. For added convenience, you can download the corresponding data as an Excel file. Stay informed of the latest trends and changes in the market through this user-friendly visualisation. Download the Excel file here: https://www.unum.capital/research-disclaimer

Introduction In the world of equity market analysis, traders and investors often seek to identify promising investment opportunities by evaluating the performance of various shares. One valuable tool that aids in this analysis is the Relative Rotational Graph (RRG). RRG is a graphical representation that helps investors understand the relative strength and momentum of different shares within a given market or sector. What is a Relative Rotational Graph (RRG)? A Relative Rotational Graph is a visual representation of the relative performance of shares in comparison to a benchmark index or a specific group of shares. The graph plots individual shares as data points and illustrates their movement over time, relative to the benchmark. The positioning of each share on the graph provides crucial insights into its relative strength, momentum, and potential investment opportunities. How RRG Works: The Four Quadrants The RRG chart is divided into four quadrants, each representing different stages of relative performance: Leading (Leading Quadrant): Shares in this quadrant are exhibiting strong relative strength and positive momentum compared to the benchmark. They are outperforming the broader market or sector and are considered leaders in terms of price performance. These shares are regarded as potential Profit takes or Holds candidates. Weakening (Weakening Quadrant): Shares in this quadrant are experiencing a decline in relative strength compared to the benchmark. While they might still be in an uptrend, their momentum is slowing down, and they may be losing some of their leadership positions. These shares are classified as potential Deteriorating candidates or short-selling. Lagging (Lagging Quadrant): Shares in this quadrant are underperforming the benchmark. They are experiencing weak relative strength and may be struggling compared to other shares or the broader market. These shares are classified as potential Avoid candidates. Improving (Improving Quadrant): Shares in this quadrant are showing signs of improvement in relative strength, indicating that they are gaining momentum and starting to outperform the benchmark. These shares are considered as potential Buy candidates. Interpreting RRG for Investment Insights When analysing a Relative Rotational Graph, traders and investors can draw several meaningful conclusions: Identifying Leaders and Laggards: RRG helps investors quickly identify which shares are leading the market's upward trends and which are lagging behind. Leading shares in the Leading Quadrant might be attractive investment candidates, while those in the Lagging Quadrant could warrant closer examination to understand potential weaknesses. Spotting Trend Reversals: A changing position of a share on the RRG can signal a potential trend reversal. For example, a share moving from the Weakening Quadrant to the Improving Quadrant may indicate a shift in momentum and an upcoming upward trend. Diversification Insights: RRG can assist in portfolio diversification by highlighting shares that exhibit a low correlation with the benchmark. Adding shares with diverse movement patterns can help reduce overall portfolio risk. Monitoring Sector Rotations: RRG is especially useful for sector rotation strategies, where investors rotate their investments based on the relative strength of sectors. It helps identify which sectors are currently leading or lagging in the market. Limitations of RRG While RRG is a valuable tool, it is essential to recognize its limitations: Historical Performance: RRG is based on past price data and may not always predict future movements accurately. Not a Standalone Indicator: RRG should be used in conjunction with other technical and fundamental analysis tools for comprehensive decision-making. Volatility Impact: Highly volatile shares may exhibit erratic movements on the RRG, making interpretation challenging. Conclusion Relative Rotational Graphs provide traders and investors with a powerful visual representation of the relative performance of shares compared to a benchmark index or a group of shares. By understanding the quadrants and interpreting the movements of individual shares, investors can gain valuable insights into market trends, identify potential investment opportunities, and optimise their portfolio allocations. As with any investment analysis tool, it should be used alongside other methods and within the context of a well-thought-out investment strategy. Top 40 constituent RRG chart: The updated RRG chart displayed below compares the individual constituents of the Top 40 index against the index itself. This chart undergoes daily updates, and to enhance clarity, various colour backgrounds are utilised for ease of reference. Leading (Leading Quadrant): Green background. These shares are regarded as potential Profit takes or Hold candidates. Weakening (Weakening Quadrant): Yellow background. These shares are classified as potential Deteriorating candidates or short-selling. Lagging (Lagging Quadrant): Red background. These shares are classified as potential Avoid candidates. Improving (Improving Quadrant): Blue background. These shares are considered potential Buy candidates. https://www.unum.capital/research-disclaimer

Introduction In the world of technical analysis, traders and investors often use various tools and indicators to gain insights into market trends and potential price movements. One such tool is the Linear Regression Channel, which utilises statistical concepts like standard deviation to help identify the potential range of price action. Understanding how to interpret and use the Linear Regression Channel in conjunction with standard deviation can provide valuable information for traders to make informed decisions. What is Linear Regression Channel? The Linear Regression Channel is a technical analysis tool that plots a straight line based on the linear regression of the price data over a specific period. This line serves as the central axis of the channel, with two parallel lines drawn above and below it, representing the upper and lower ranges. The channel helps traders visualize the general direction of the trend and possible areas of support and resistance. Calculating the Linear Regression Channel involves fitting a linear regression line to the price data, usually based on the closing prices, over a defined look-back period. The resulting line represents the average or mean of the price data over that period. Understanding Standard Deviation Standard deviation is a measure of the dispersion or variability of the price data around the linear regression line. In the context of a Linear Regression Channel, standard deviation helps determine the width of the channel, which indicates the potential volatility or uncertainty of price movements. When the standard deviation is high, it means the price data is spread out widely from the regression line, indicating higher volatility. Conversely, a low standard deviation suggests that the price data is closely clustered around the regression line, indicating lower volatility. Using Scoring to Assess Proximity to the Linear Regression Channel The term "scoring" in this context refers to a numerical value representing the distance of the current price from the linear regression line. This score is typically normalised to a scale between 0 and 10, with 1 indicating the lowest proximity to the regression line and 10 indicating the highest proximity. The relationship between the scoring and the Linear Regression Channel is as follows: Scoring Close to 0: When the scoring is closer to 0, it suggests that the current price is near the lower range of the Linear Regression Channel. This indicates that the market is potentially oversold, and the price may be due for a correction or bounce towards the mean or central axis of the channel. Scoring Close to 10: Conversely, when the scoring is closer to 10, it suggests that the current price is near the upper range of the Linear Regression Channel. This indicates that the market is potentially overbought, and the price may be due for a correction or a bounce back towards the mean. Interpreting Linear Regression Channel and Standard Deviation Together Combining the Linear Regression Channel and standard deviation provides a more comprehensive picture of the market's behaviour. When the standard deviation is wider, the channel broadens, indicating higher volatility. In contrast, a narrower standard deviation results in a narrower channel, suggesting lower volatility. Traders can use this information to: Identify Potential Reversal Zones: When the price action reaches the upper or lower range of the channel, coupled with high standard deviation, it may indicate an overextended market and a potential reversal in the opposite direction. Recognize Trend Strength: If the price remains within a narrow channel and the standard deviation is relatively low, it suggests a stable and well-defined trend, while a wide channel with a high standard deviation indicates a more erratic or uncertain market. Conclusion The Linear Regression Channel and standard deviation are valuable tools for traders to gain insights into the potential range of price action and market volatility. When combined, they can provide a clearer understanding of trend direction, potential reversal points, and overall market sentiment. By using the scoring system to assess proximity to the channel, traders can make more informed decisions, enhancing their ability to navigate the dynamic world of financial markets. However, as with any technical analysis tool, it is essential to use these indicators in conjunction with other forms of analysis and risk management strategies to make well-rounded and informed trading decisions. Top 40 share scoring and selected markets The bar chart displayed below presents the constituents of the Top 40 index. This dynamic bar chart is updated weekly, providing valuable insights. https://www.unum.capital/research-disclaimer

Introduction: Relative Price Strength (RPS) is a critical technical indicator used by traders and investors to assess the performance of an equity relative to the broader market or its industry peers. By understanding RPS and incorporating it into their investment strategies, individuals can gain valuable insights into an equity's potential for future price movement. We will delve into the concept of RPS, how it is calculated, and its significance in share trading. What is Relative Price Strength (RPS)? Relative Price Strength, also known as Relative Strength, is a momentum-based metric that evaluates an equity's performance relative to a benchmark index or a group of peers. It is used to identify equities that have outperformed or underperformed in their market or sector over a specified period. RPS Calculation: To calculate RPS, we compare the price performance of a particular share to the performance of a designated benchmark index or a group of shares. The RPS calculation typically involves comparing the price change over a specific time frame, depending on the preference of the trader or investor. The formula for calculating RPS is as follows: RPS = (Share's Price at date x / Share's Price at date y) / (Benchmark's Price at date x / Benchmark's Price at date y) date x = most recent price of the share or benchmark date y = price of the share or benchmark x periods ago Understanding RPS Values: The RPS value is represented as a ratio, and it indicates the stock's relative strength compared to the benchmark or peer group. A value above 1 suggests that the share has outperformed the benchmark or peers, while a value below 1 indicates underperformance. Significance of RPS in Share Trading: Identifying Strong Performers: RPS helps traders and investors identify shares that have demonstrated significant price strength compared to the overall market or their sector. These shares are often considered strong performers and may continue to exhibit positive price movement. Trend Confirmation: RPS can help confirm the prevailing trends in the market or sector. Shares with high RPS values are more likely to be in uptrends, while those with low RPS values might be in downtrends. Share Selection: Traders can use RPS to filter and prioritise their share selection process. A higher RPS value could make a share more appealing for trading or investment opportunities. Divergence Detection: RPS can also help identify potential divergences between a share and the broader market or sector. Divergences occur when an equity's price moves in the opposite direction to its RPS, which might signal a potential trend reversal or correction. Limitations of RPS: While RPS can be a valuable tool for assessing relative performance, it has some limitations that traders and investors should be aware of: Short-Term Focus: RPS is primarily a short to medium-term indicator. It might not accurately reflect a share's long-term potential or fundamental strength. Benchmark Selection: The choice of benchmark or peer group can significantly impact the RPS calculation. Different benchmarks can lead to different RPS values for the same share. Conclusion: Relative Price Strength (RPS) is a valuable technical indicator that provides insights into an equity's relative performance compared to a benchmark index or its peers. By understanding RPS, traders and investors can make more informed decisions, identify strong performers, and validate existing trends in the market or sector. However, like any single metric, RPS should be used in conjunction with other indicators and fundamental analysis to make well-rounded investment decisions. JSE All Share headline indices RPS: In the financial markets, certain headline indices have showcased remarkable outperformance, suggesting a notable influx of capital. This surge in capital inflow signals growing trader and investor confidence and interest in these headline indices. Whereas traders and investors seem to be reallocating their investments away from headline indices where there is an outflow of capital. Capital Inflow headline indices (in ranking order): Financials Industrials Capital outflow headline indices (in ranking order): Resources JSE All Share share RPS: Understanding the performance of individual shares in comparison to the broader market is crucial for traders and investors seeking to capitalise on market trends. The table below highlights the top 20 and bottom 20 shares based on RPS, with a lookback period of the last 10 days, indicated by their ranking changes since the previous update. The table is updated daily. The Top 20 RPS Leaders: these are the shares that have exhibited the strongest relative price performance within the JSE All Share index over the past 10 days. The Bottom 20 RPS Laggards: these shares have shown the weakest relative price performance within the JSE All Share index over the same 10-day period. JSE All Share sector RPS: In this analysis, we will examine the top 10 and bottom 10 sectors based on RPS, considering the lookback period of the last 10 days. The table is also updated daily. The Top 10 RPS Leading Sectors These sectors have demonstrated the strongest relative price performance within the JSE All Share index during the 10-day lookback period. The Bottom 10 RPS Lagging Sectors Conversely, these sectors have exhibited the weakest relative price performance within the JSE All Share index over the same 10-day period. https://www.unum.capital/research-disclaimer

The market overview serves as a comprehensive snapshot of the financial markets, providing a summary of various asset classes, sectors, and indices. Its primary purpose is to showcase the performance of different financial instruments over a specific period. https://www.unum.capital/research-disclaimer

The Week That Was Major US equity indexes finished in positive territory on Friday, influenced by US Federal Reserve Chair Jerome Powell's comments at the Jackson Hole Summit. The Dow Jones Industrial Average climbed by 247 points, and the S&P 500 along with the Nasdaq Composite saw gains of 0.7% and 0.9%, respectively. In his remarks, Powell acknowledged the robust economic data received over the summer, indicating that the Fed is ready to implement further rate hikes to achieve its 2% inflation target. However, he also signalled that interest rates are expected to remain stable in September to assess incoming economic data, as well as to evaluate the continually changing outlook and associated risks. In individual stock movements, Affirm skyrocketed by 28.8%, and Workday leapt by 5.4%, both bolstered by strong earnings and revenue reports. Gap shares ascended by 7.1% following mixed quarterly results, while Nordstrom shares dipped 7.7%, despite reporting favourable outcomes. Marvell Technology's stock took a 6.6% hit after issuing a cautious future outlook. On a weekly basis, the Dow Jones concluded with a 0.45% loss, while the S&P 500 and the Nasdaq Composite recorded gains of 0.8% and 1.7%, respectively. On Friday, the JSE All Share Index surrendered its initial gains, closing down by approximately 0.6% at 73 836 points. This decline was largely driven by losses in major technology companies Naspers, which fell by 1.4%, and Prosus, down 0.8%, along with downturns in resource-linked sectors and industrials, both losing 0.8%. On the domestic front, South African President Cyril Ramaphosa revealed last Thursday, at the end of a three-day BRICS leaders' summit, that the alliance of developing nations will welcome six new members—Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the United Arab Emirates—starting January 2024. Additionally, Kgosientsho Ramokgopa, South Africa's Minister of Electricity, announced that the country is in active discussions with fellow BRICS members to address its ongoing power crisis. Despite Friday's downturn, the JSE All Share Index ended the week with an overall gain of around 1%. The Week Ahead As we navigate the final trading week of August, it is clear that the market landscape has been more tumultuous and event-driven than is typically expected for this season. Looking ahead to September, traders and investors can expect a robust set of economic indicators to be released. In the US, key data such as the Personal Consumption Expenditures (PCE) inflation index, Gross Domestic Product (GDP), and the Institute for Supply Management (ISM) manufacturing survey are on the agenda. Additionally, the final Purchasing Managers' Indices (PMIs) are slated for release in several major economies including the US, UK, European Union and Japan. With such a wealth of information on the horizon, market participants should brace themselves for what promises to be an action-packed period ahead. Key Themes for the Week Ahead US PCE inflation Inflation metrics remain pivotal in shaping expectations for monetary policy decisions, thereby influencing global market sentiment. US inflation data commands significant attention, with the Personal Consumption Expenditures (PCE) index standing out as particularly crucial. This is largely because the Fed often relies on PCE as its go-to inflation measure. The upcoming PCE inflation report's impact could be contingent on the tone Fed Chairman Jerome Powell adopts in his speech at Jackson Hole. In simple terms, if inflation shows signs of slowing down, the Fed may adopt a less hawkish stance, potentially leading to a weaker US dollar. In the previous month, we witnessed the annual core PCE rate plunge to a 21-month low, settling at 4.1%—the most precipitous drop since the onset of the pandemic. While it is uncertain whether the data will reflect another substantial decrease in the coming week, the trend deserves scrutiny. A closer look at the numbers reveals that the services component of the PCE has increased by 0.3% month-over-month in three of the last four months. Consequently, a figure of 0.2% or lower in the upcoming report would be seen as a favourable development. US employment data (Nonfarm payroll, ADP payrolls, jobless claims) Setting aside the Purchasing Managers' Indices (PMIs), the prevailing employment data does not offer compelling evidence to anticipate Fed rate cuts in the near term. While other employment metrics have fuelled speculation about economic softness, they have not commanded as much influence as one might expect. This is primarily because the Fed tends to base its decisions on lagging indicators, such as the unemployment rate. With an unemployment rate currently at 3.5%, the likelihood of the Fed perceiving this as signalling a recession—and thus cutting rates—is relatively low. Nonetheless, the upcoming monthly nonfarm payroll report, scheduled for release on Friday, should not be overlooked. There are also other employment indicators on the horizon that could help set market expectations. Should these indicators outperform expectations, traders and investors may attempt to anticipate a stronger nonfarm payroll report, and vice versa. Specifically, job openings data will be released on Tuesday, followed by the ADP payroll report on Wednesday, and weekly jobless claims on Thursday. Each of these metrics can offer valuable insights and potentially sway market sentiment. ISM manufacturing PMI According to the Institute for Supply Management (ISM), the U. manufacturing sector reached its peak in early 2021 and has been in a contractionary phase for the past nine months. While another lacklustre report may not dramatically alter perceptions, a sharp decline could reinforce the subdued data reflected in the S&P Global PMI survey. On a brighter note, the rate of contraction in new orders has slowed significantly. Therefore, any optimism in the sector would hinge on seeing these new orders approach, or even surpass, the 50-mark, which would indicate potential future expansion Final PMIs Although flash PMIs typically comprise 80-90% of total survey responses, their final versions are often overlooked, largely because they usually do not deviate significantly from the preliminary figures. However, given the recent trend of declining manufacturing and services PMIs in the UK, Europe, and the US, traders and investors might pay closer attention to the final reports this week. There is a possibility that the initial estimates were overly pessimistic, opening up the chance for slight upward revisions. On the flip side, the final PMIs could either corroborate the dismal picture painted by the flash reports or, in a more negative scenario, indicate an even faster rate of decline. US GDP While it may not qualify as a headline event, the upcoming GDP data deserves some attention, especially given that the preliminary release notably surpassed market expectations. This dual-edged outcome has implications: it both alleviated concerns about a steep economic downturn and delayed market expectations for Fed rate cuts until deeper into 2024. Thus, the release will clarify whether the US economy genuinely expanded by 2.4% in the second quarter, or if that figure needs a downward revision—potentially heightening concerns of a more severe economic slowdown. US earnings As the second-quarter US earnings season draws to a close, markets still have noteworthy updates to consider. Forthcoming results from Salesforce, a CRM industry leader, and cybersecurity firm CrowdStrike will be closely watched, alongside earnings reports from computer manufacturers HP and Dell. Significantly, both Broadcom and VMware are slated to report this week, as they advance toward completing their high-profile merger. Attention will also be directed toward China, with financial updates expected from Ping An Insurance, e-commerce giant Pinduoduo, and electric vehicle manufacturer NIO. Swiss banking titan UBS will similarly be in focus, following its high-profile rescue of Credit Suisse earlier this year. In the UK, markets will be closed for a bank holiday on Monday. The remainder of the week has a lighter schedule, featuring key updates from distributor Bunzl, insurer Prudential, and oil firm Gulf Keystone Petroleum. South Africa News The Western Cape minibus taxi strike in August, called without notice, cost the provincial economy R5 billion and caused reputational damage to the country, Parliament was told on Thursday evening. The Economic Freedom Fighters (EFF) in Tshwane has threatened to lead a protest in support of the scores of municipal workers who were recently dismissed. More than 100 workers affiliated with the South African Municipal Workers Union (Samwu) lost their jobs for protesting over the city’s refusal to implement a 5.4% salary increase1. The dismissal followed the workers’ continued protest after the city obtained an interim interdict against the strike. While the municipality has a few times said it cannot afford to increase wages, the EFF says the rights of the workers are being infringed upon. Deputy President Paul Mashatile's spokesperson Vukani Mde has dismissed claims that Indian Prime Minister Narendra Modi was snubbed during his visit to South Africa for the BRICS summit. Economic Calendar In the upcoming economic calendar for this week, several significant events are scheduled to take place. source: investing.com https://www.unum.capital/research-disclaimer

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