Economic Overview — September 2026.

A month ago the FTSE/JSE All Share was the best performing major equity market in the world, lifted almost entirely by gold and platinum miners. In September it gave the gain back and then some. The All Share fell 6.7%, the gold price fell about 6%, and gold miners dropped roughly 15%. The index is now down for the year again. At the same time, interest rates went up almost everywhere that matters to a South African portfolio: in the United States, in Japan, in Europe and, on 23 September, here. Last month we wrote that flows reverse. We did not expect it to happen quite this quickly, and we were also wrong about which way the Reserve Bank would lean.

What August gave, September took back

The reversal on the JSE was concentrated in exactly the places that had driven August. The Resi-10 fell 10.9%. Gold miners lost around 15% and platinum miners around 7%. According to Anchor Capital, the two groups together cost the index more than three percentage points. Gold Fields fell about 19%, hit both by the lower gold price and by its large takeover proposal for Australia’s Northern Star, which was rejected. AngloGold Ashanti and Impala Platinum each lost more than 12%.

That was not the only drag. Naspers fell about 12% and Prosus about 8%, together taking roughly one percentage point off the index. Industrials fell 5.9% and financials 4.4%. Listed property was roughly flat, up 0.3%.

Underneath, there was a quieter story. Shares tied to the domestic economy fell about 3.3%, which is a poor month but a long way from the headline. General retailers rose about 5%, with Shoprite up 6% and Clicks up 5%. Sasol rose 17.5% on the back of a sharp rise in the oil price. The Capped All Share, which limits how much any single company can weigh, fell 5.8%, almost a full percentage point less than the uncapped index.

The same concentration that made August look excellent made September look worse than it was for most South African businesses.

That is the useful lesson from the two months taken together. Over August and September combined, the All Share is down a little rather than up a lot. Somebody who bought the index in the middle of August because it was topping the global tables has had an uncomfortable six weeks.

Rates went up almost everywhere

The US Federal Reserve raised its target range by a quarter point to 3.75%–4% on 16 September, its first increase since 2023, in a unanimous 12–0 vote. The statement said simply that inflation remains elevated. US consumer inflation was 3.4% in the year to August, the same as July. The Bank of Japan raised its policy rate to 1.25% two days later, the highest level since 1995. The European Central Bank also raised rates by a quarter point. The Bank of England held.

Energy is the common thread. Brent crude rose about 14% over the month and moved back above $100 a barrel. Eurozone inflation jumped to 3.8% in September from 3.2% in August, with energy prices up 18.8% on a year earlier, according to Eurostat’s flash estimate.

The pressure showed up most clearly in bond markets. The US 10-year Treasury yield rose by more than half a percentage point during the month to end around 5.3%. That is a big move for the world’s reference interest rate, and it is the number that quietly reprices everything else: mortgages, company borrowing, and the price investors are willing to pay for future profits.

Meanwhile the US labour market softened. Employers added only 29,000 jobs in September and unemployment rose to 4.2%. A central bank raising rates into a weakening jobs market is a sign of how seriously it is taking inflation.

Last month we noted that gold had risen in August even though the case for it weakens when rates rise. In September it behaved as the textbook says it should. The dollar strengthened about 2%, yields rose, and gold fell. We do not claim to have predicted the timing. The point we made then still stands: a move that large in a basket of mining shares is money moving, and money moves both ways.

One more detail matters for anyone holding a global index fund. The S&P 500 fell only about 0.3% in September, but the equal-weighted version of the same index, which gives every company the same weight, fell 4.8%. The Nasdaq rose. A handful of very large companies benefiting from artificial intelligence held the headline up while the typical American share had a poor month. It is the same shape as the JSE in August, in a different market and a different sector.

A hike into a soft economy

The South African Reserve Bank raised the repo rate by 0.25 percentage points to 7.25% on 23 September, effective two days later. The decision was unanimous. The prime lending rate moves to 10.75%.

In our August overview we framed the September meeting as a choice between an inflation rate falling for good reasons and an economy that had just contracted. The Bank chose inflation. Headline consumer inflation edged up to 4.4% in August from 4.3% in July, and the Governor said the fuel price shock had intensified. The Bank expects inflation to stay elevated through 2027 and to return to its 3% target only towards the end of that year. It cut its growth forecast for 2026 to 1.2% from 1.4%. Core inflation, which strips out food and energy, actually eased to 4.1%, so this is a hike aimed at preventing a fuel shock from spreading rather than at broad price pressure that is already here.

For a household, the arithmetic is straightforward. On a R1.5 million home loan over 20 years at prime, the monthly repayment rises from about R14,980 to about R15,230, an increase of roughly R250 a month. That is manageable for most, but it arrives alongside a petrol price that rose by more than R3 a litre in October.

The Reserve Bank has told us what it is more worried about. It is not growth.

The business data was mixed rather than uniformly weak. The S&P Global South Africa PMI, which covers the whole private sector, fell to 49.0 from 50.5, below the line that separates growth from contraction, with companies reporting the sharpest fall in new orders in about two and a half years. Delays at the Port of Durban and higher fuel costs both featured. The Absa manufacturing PMI did the opposite, jumping to 50.7 from 45.8, its first reading above 50 since May. Last month factories were struggling while the rest of the economy held up. This month the two swapped places. Neither reading on its own is a trend.

For your interest

What we are watching

The first is the September inflation figure, due later this month, and the October figure after it, which will carry the full petrol increase. The Reserve Bank has said plainly that it will not let a fuel shock settle into broader prices. If the next two prints move up decisively, the case for a further increase at the November meeting strengthens. That is a risk to watch rather than our forecast.

The second is the US 10-year yield. At around 5.3% it is high enough to compete seriously with shares for investors’ money, and it has moved quickly. A sustained rise in long-term yields is the single development most likely to put pressure on equity valuations globally, particularly in the large technology companies that carried the US market in September.

The third is concentration, again. In August the JSE’s return came from one sector. In September the S&P 500’s came from a handful of companies. In both cases the index looked healthier than the typical share inside it. The point is not whether index exposure is right or wrong. It is worth knowing what is actually driving the number you are looking at.

None of this changes how we build portfolios. Two months ago the local market looked like the place to be, and one month ago gold looked unstoppable. Neither impression lasted. A portfolio built around your goals and time horizon, rather than around last month’s leaders, is designed for exactly this kind of quarter.

Market overview

Global overview

Global equities fell. MSCI World returned −1.2% and MSCI ACWI −1.1% in US dollars, while emerging markets lost about 0.6%. The S&P 500 slipped about 0.3% and the Nasdaq rose about 1.9%, held up by a small group of large technology companies, while the equal-weighted S&P 500 fell 4.8%. European shares were weaker, with MSCI Europe ex UK down 2.6% in euros and 4.9% in dollars, and the FTSE 100 down about 2%. MSCI China fell 4.6% in dollars. The US 10-year Treasury yield rose more than half a percentage point to around 5.3%, the US dollar strengthened about 2%, Brent crude rose about 14% and gold fell about 6%. The Fed and the Bank of Japan both raised rates, as did the European Central Bank, while the Bank of England held. Presidents Xi Jinping and Donald Trump met during a state visit to Washington late in the month.

Local overview

South African equities fell sharply after August’s strong month. The FTSE/JSE All Share returned −6.7% and the Capped All Share −5.8%. Resources lost 10.9%, led by gold miners down around 15% and platinum miners down around 7%. Industrials fell 5.9%, with Naspers and Prosus down about 12% and 8% respectively, and financials fell 4.4%. Listed property was roughly flat. South African bonds were broadly unchanged over the month, while the 10-year government bond yield rose about a quarter of a percentage point to around 9%. The rand weakened about 1.9% against the US dollar, from roughly R16.12 to R16.42. The Reserve Bank raised the repo rate to 7.25%, consumer inflation edged up to 4.4% in August, and the S&P Global PMI slipped below 50.

Figures in this overview are drawn from public sources including Anchor Capital, Janus Henderson Investors, MSCI, Simeka, Graviton Financial Partners, the South African Reserve Bank, the South African Government News Agency, the US Federal Reserve, the US Bureau of Labor Statistics, Eurostat, S&P Global and the Absa/BER Purchasing Managers’ Index. Different providers report slightly different figures for the same month depending on index construction and whether returns are measured on a price or total return basis. Past performance is not a guide to future returns. This is general market commentary and not advice; it does not take your circumstances into account.