Trading update : 7 May 2026

Clarity on markets

While markets have climbed to record highs on the back of tech earnings momentum and hopes for a US-Iran peace deal, seasoned investors are spotting yellow flags in the narrow breadth of the rally. Renewed trade tensions between the US and EU, and persistent inflation that has central banks in a holding pattern, add further cause for pause. Despite these headwinds, the AI boom continues to fuel surging forecasts for players like AMD and Super Micro, while the pharmaceutical “weight wars” heat up with Novo Nordisk’s pivot to oral treatments.

Yellow flags

Stocks climbed to a record after President Trump signalled progress toward a final agreement with Iran, adding fresh momentum to markets already buoyed by a rally in tech shares. The prospect of lower energy costs and reduced uncertainty improved the outlook for global growth, reinforcing support for equities even at record levels.

However, the US stock market’s rally to new highs has been propelled by a small number of stocks, causing concern among investors and analysts about narrow breadth. In an interview with Bloomberg Television, Ben Snider, chief US equities strategist at Goldman Sachs, said: “If you look at the S&P 500, we’re at an all-time high, but the median stock in the index is still about 13% below its respective high. That’s one of the widest gaps we’ve seen in about 25 years. It does raise some yellow flags looking at the market.”

Trading blows

US President Trump said he was raising tariffs on cars and trucks from the EU to 25%, claiming that the bloc had failed to fully comply with a trade agreement negotiated with the US, reports Bloomberg. Bernd Lange, who chairs the European Parliament’s trade committee, said that Trump’s behaviour was unacceptable.

Holding patterns

Spiralling energy costs are creating a big headache for central banks around the world, prompting a rethink of the path ahead for inflation targeting and interest rates. The inflationary pressures have created divisions at the Federal Reserve over its easing preference, with rates likely to remain on hold in the near term, before cuts resume later in the year. Meanwhile, the ECB, Bank of England and Bank of Japan will likely tighten at the respective June meetings. The People’s Bank of China is set to remain on hold, with further likely later in the year. In South Africa, the Reserve Bank is carefully monitoring incoming data to guide their next rate decisions.

AI tailwinds

Advanced Micro Devices (AMD-NASQ) shares surged in aftermarket trade after a flood of data centre spending bolstered its Q2 sales forecast. Super Micro Computer (SMCI-NASQ) also surged after the company reported improved margins and gave an upbeat forecast.

Thin on data 

According to a Bloomberg report, US companies may choose to report earnings semi-annually instead of quarterly under a new SEC proposal, potentially reducing disclosures. Some analysts and investors will likely oppose the proposal, reported the financial news outlet.

Weight wars

Struggling Danish drugmaker, Novo Nordisk, is slashing prices and relying on its Wegovy obesity pill to put it back in the race with Eli Lilly & Co. (LLY-NASQ). The key question is whether Novo will be able to succeed in the oral market after failing with injections. The first-to-market Wegovy pill had the best launch of any recent treatment in the US, according to the company. 

Supply chain snarl-ups

The Financial Times reports that Detroit carmakers have warned that the financial hit from higher commodity prices will rise to $5 billion this year as the Middle East war strains supply chains for materials from aluminium to plastics and paint.

Emerging optimism

Emerging markets rallied to an all-time high, and a currency index returned to pre-war levels as traders grew optimistic that the US and Iran are moving closer to a peace deal. Developing-world equities rose 3.1% in mid-week trade, pushing their year-to-date advance to almost 22%. However, emerging assets moved off session highs as Donald Trump told the New York Post that it is “too soon” to think about face-to-face talks between the countries.

Refined approach

Glencore (GLN-JSE) has restarted its Cape Town refinery and is ramping up production, according to unnamed sources, to help ease fuel concerns. The 100,000-barrel-a-day Astron Energy plant – one of two operational oil refineries in the country – was shut for planned work as the US-Israeli war on Iran began at the end of February.

Chinese car carnage

Vehicle sales data for April from NAAMSA shows that total new car sales remain robust, growing +13%, and passenger new car sales up 14.3%, but the contribution from Motus (MTH-JSE) brands – Hyundai, Kia, and Renault – contracted by 5%. The loss in market share is due to aggressive Chinese imports, including Jetour (+215%) and Chery (+30%). This data suggests that while the consumer is still spending, they are down-trading to high-value, lower-margin brands, placing pressure on Motus’s exclusive distribution margins. Motus will need to successfully pivot its massive retail footprint toward these rising Chinese OEMs and lean on its aftermarket parts division to maintain its market position.

Nothing concrete yet

Heidelberg Materials AG is reportedly in talks with banks to appoint financial advisers as it considers a bid for top cement maker PPC Ltd. (PPC-JSE).  The German building-materials firm already has a presence, especially in West Africa, and wants to expand on the continent.

Stock focus: Glencore

Glencore’s (GLEN-JSE) production results for Q126 show the company is effectively navigating a complex global landscape, maintaining its full-year guidance despite some seasonal “niggles”. The standout performer was copper, which saw production climb to approximately 200kt – a 19% increase year-over-year – keeping the company on track to meet its annual targets. While industrial operations have faced rising input costs due to the global conflict, specifically higher prices for diesel and acid, the company anticipates that elevated commodity prices will more than offset these inflationary pressures, leading to healthy margin expansion.