CAPITAL SEASONS
Weekly Market Commentary
Week Ending 7 August 2026
What happened?
Markets found their footing this week. The S&P 500 is now 3.5% above its 50-day average, the Nasdaq 100 close behind at just over 1% — both comfortably above their 200-day lines too. Volatility eased to its calmest reading in weeks. Ten of eleven sectors advanced over the month, led by energy and technology, with only utilities pulling back. Underneath the index-level story, market breadth stayed genuinely broad rather than a handful of names doing the lifting.
Why did it happen?
Earnings did most of the heavy lifting. With the vast majority of S&P 500 companies now reported, the beat rate on both profits and revenue is running at its strongest pace since 2021. Even stripping out the very largest surprises, underlying earnings growth still sits well above 30% year-on-year — a seventh straight quarter of double-digit growth. That’s real support under this rally, not just sentiment.
The lingering worry — shipping disruption around the Strait of Hormuz — eased rather than resolved. Oil swung hard through the week as reports emerged of Iran and Oman finalising a framework to reopen shipping routes through the strait, with the US involved in the background talks. It’s a temporary, interim arrangement with real details still unsettled, not a clean resolution — but the direction of travel this week was constructive, and oil gave back some of its recent gains as a result.
Labour data told a more mixed story than headlines suggest. Jobless claims are at their lowest since 2022 — very few people are losing jobs. But job creation itself was thin: the broad payrolls count fell in July, and private hiring came in well below expectations, the softest pace in six months. It’s a low-churn labour market right now — not many losing jobs, but not many being hired either.
South Africa
The rand strengthened this week, and for the same reason driving the oil story above. USD/ZAR fell to 16.13 on Thursday, and the rand is now roughly 1.7% stronger over the past month. That’s a real turnaround — it had slumped to a three-month low near 16.98 on 24 July, hit by elevated oil prices from the Iran conflict (South Africa imports the great majority of its energy) and by the Reserve Bank’s decision that same week to hold rates despite warning about inflation risk. As the Strait of Hormuz talks have progressed this week, the rand has recovered right alongside it.
Worth being precise about what that means for a portfolio built on US-dollar holdings: a strengthening rand is a mild headwind in rand terms, even in a week where the underlying dollar positions themselves gained. Not something to act on — just worth knowing so the rand move doesn’t read as a step backward when the underlying story is a good one.
Inflation is the less comfortable half of the picture. June CPI came in at 5.0% headline, 4.1% core — both above the Reserve Bank’s 3% target band. The SARB held its repo rate at 7% at its 23 July meeting, but the vote was genuinely split: four members for holding, two wanting a hike. That’s a hawkish hold, not a comfortable one. The next policy meeting isn’t until September, so no fresh decision this week, but the split vote is unresolved tension worth watching.
The JSE All Share is sitting around 112,000, up roughly 12% over the past year and firmer on the week, moving with the same easing-tension, weaker-dollar tailwind as the rand. Gold miners were mixed rather than a clean story either way this week, so no strong resources narrative to draw from these few days alone.
What does this mean for your portfolio?
The season reading holds in Spring — building conditions, not yet full stride. Fear is low, participation is broad, and momentum is still finding its feet after a choppier few weeks. One thing worth naming honestly: smaller companies are lagging the strength you see in the large-cap indices. It’s not a warning sign yet, but it’s the kind of quiet divergence worth watching rather than ignoring.
What should you watch next?
- Whether next month’s hiring data confirms this month’s softness or proves to be a one-off wobble
- Whether the Strait of Hormuz framework holds through to an actual reopening, or stalls on the details still unresolved
- Whether smaller companies start participating more fully, or continue to lag — a genuine signal either way
- The Reserve Bank’s inflation stance ahead of its September meeting, given how split this month’s vote was
The Silicon Season — An AI Infrastructure Watch
Chip and memory names had a strong week, with several posting some of the sharpest earnings-driven moves of the period. The AI infrastructure theme is still very much intact — the question worth tracking isn’t whether the theme is real, but whether leadership keeps broadening beyond the largest names or stays concentrated at the top. This week leaned toward broadening.
| JUST STARTING OUT Why does a stock sometimes fall even after a company beats expectations? It sounds backwards, but it happens often. The market doesn’t just price in what a company earned — it prices in what investors already expected, plus a guess at what’s coming next. If a company beats this quarter but the quality of that beat looks unlikely to repeat (a one-off gain, a temporary cost saving), or if guidance for the next quarter looks only “fine” rather than exciting, the stock can fall even on genuinely good news. The lesson: don’t just look at whether a company beat — look at why, and whether that reason is likely to happen again. |
A note from Mari
This felt like a good turn for markets this week — though if I’m honest, I’d have liked to see a proper shake-out first, a real dip before the recovery, rather than this shallower pullback. But a turn is a turn, and I’ll take it. Earnings did a lot of the heavy lifting here, and even the one thing that had been nagging at me — the Strait of Hormuz situation — looks to be genuinely easing rather than escalating further. One week is a signal. Let’s see if next week makes it a pattern.
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Earnings Carry the Season