THE DAILY BRIEF ECONOMICUPDATE TUESDAY,07AUGUST2018 - CAPRICORN ASSET MANAGEMENT

The Daily Brief

Economic Update                                              Tuesday, 07 August 2018

Stocks Push Higher on Earnings; Dollar Declines: Markets Wrap
Most major stocks gauges advanced on Tuesday as earnings season continued, helping buoy investor
sentiment against a backdrop of trade angst and geopolitical noise. The dollar slipped against major
peers and Treasuries were steady. Miners were among the big gainers in the Stoxx Europe 600 Index
as commodities climbed. Futures on the Dow, S&P and Nasdaq all pointed to a higher open… As
earnings season enters its final phase, most major U.S. companies have now reported and four out
of five have surprised to the upside. That’s helped put the S&P 500 within touching distance of a
record, even as investors fret the escalating trade war between America and China. Meanwhile,
geopolitical concerns linger in the background, including confusion about the status of negotiations
intended to lead to the denuclearization of the Korean peninsula and the Trump administration’s
restoration of some U.S. sanctions on Iran. – Bloomberg

Trump Restores Iran Sanctions as Rouhani Feels Economic Pressure
The first round of renewed U.S. sanctions on Iran took effect as President Hassan Rouhani -- under
increasing economic and political pressure -- spurned President Donald Trump’s suggestion for talks
with “no preconditions.” Following an executive order signed by Trump, the U.S. imposed new
restrictions intended to stop the purchase of dollar banknotes by Iran, prevent the government from
trading gold and other precious metals and block the nation from selling or acquiring various
industrial metals. The measures, which took effect at midnight in Washington, also targeted the auto
industry and banned imports of Persian carpets and pistachios to the U.S… The U.S. is weighing case-
by-case exemptions for some countries from the next set of sanctions -- which take effect in 90 days
-- targeting Iranian oil exports… The administration had previously signaled that countries that don’t
eliminate their imports of Iranian oil need to show “significant” reductions in those purchases to
qualify for temporary waivers. – Bloomberg

China Offers Infrastructure to Cement New Ties With Burkina Faso
Months after severing ties with Taiwan, Burkina Faso says it’s counting on Chinese money to get
large infrastructure projects off the ground, including a key highway linking the West African nation’s
two main cities. Burkina Faso broke off diplomatic relations with Taipei in May in favor of China,
leaving only the tiny kingdom of Swaziland as the island’s last African ally and cutting the number of
countries that recognize Taiwan to 18… With the announcement that China would better serve its
interests, Burkina Faso reneged on an earlier pledge to remain loyal to Taiwan it made shortly after
the cash-strapped island nation of Sao Tome and Principe changed sides. – Bloomberg

Risk of load shedding low, but could increase by Tuesday evening – Eskom
The risk of load shedding remains low for Tuesday morning, Eskom said in a statement issued on
Monday evening. It cautioned, however, that the risk increases for the evening peak period from
17:00 to 21:00 on Tuesday evening. Eskom did not have to implemented rotational load shedding on
Monday. Customers are advised to keep checking their load shedding schedules on the Eskom and
their municipal website and to plan on the assumption that load shedding will take place. On Friday
Eskom said there will be a high risk of load shedding for the next 30 days as recovery teams start to
get to work fixing damage the power utility says was caused by strikes. – Fin24

Stats of the Day

Data Releases
                   Local Time   Country         Indicator Name               Period
                   08:00        South Africa    Net $Gold & Forex Res        Jul
                   08:00        South Africa    Gross $Gold & Forex Res      Jul
                   13:00        South Africa    Manuf Production MM          Jun
                   16:00        United States   JOLTS Job Openings           Jun
                   21:00        United States   Consumer Credit              Jun
                   22:30        United States   API weekly crude stocks      30 Jul,   w/e
                   22:30        United States   API weekly gasoline stk      30 Jul,   w/e
                   22:30        United States   API weekly dist. stocks      30 Jul,   w/e
                   22:30        United States   API weekly heating oil       30 Jul,   w/e
                   22:30        United States   API weekly crude imports     30 Jul,   w/e
                   22:30        United States   API weekly product imports   30 Jul,   w/e
                   22:30        United States   API weekly crude runs        30 Jul,   w/e
                   22:30        United States   API Cushing number           30 Jul,   w/e

                                                                                 Source: Thomson Reuters

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The information contained in this note is the property of Capricorn Asset Management (CAM). The
information contained herein has been obtained from sources which and persons whom the writer
believe to be reliable but is not guaranteed for accuracy, completeness or otherwise. Opinions and
estimates constitute the writer’s judgement as of the date of this material and are subject to change
without notice. This note is provided for informational purposes only and may not be reproduced in
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