American Express lifts revenue outlook as costs weigh on profit growth

Market Commentary

South African Market Summary

South African equities advanced on Friday, with the JSE All Share gaining 0.98% to 109,398.05 and the Top 40 rising 1.10% to 101,433.72. Sentiment followed the South African Reserve Bank’s unexpected decision on Thursday to keep the benchmark rate unchanged at 7.00%, contrary to expectations for a cut and prompting a sharp currency selloff. The Bank warned that activity may slow during the second and third quarters, although it expects conditions to improve later in 2026 as external shocks ease. Standard Bank CEO Sim Tshabalala cautioned that restrictive migration policies could undermine investment and regional trade. Separately, Aspen Pharmacare signed an MSD licensing agreement for a long-acting HIV prevention pill, potentially accelerating African filings and local production following phase-three data.

European Market Summary

European equities recovered on Friday, with the STOXX 600 rising 0.6% to 644.67 after its steepest one-day decline in two weeks, securing a second consecutive weekly gain. Germany’s DAX advanced as SAP surged 10% after second-quarter current cloud backlog growth exceeded analyst expectations. Investors also assessed the monetary-policy implications of higher oil prices after three European Central Bank policymakers warned that persistent inflation risks could require renewed tightening, despite rates being held unchanged on Thursday and a possible September increase remaining under consideration. Consumer inflation expectations eased, with the ECB survey’s median 12-month estimate falling to 3.0% in June from 3.5% in May. UK retail sales unexpectedly rose 1.0% in June, outperforming forecasts for a 0.3% decline and supporting sentiment.

US Market Summary

US equities were mixed on Friday as weakness in technology and semiconductor shares offset support from lower oil prices. The Nasdaq declined as investors reassessed the scale of artificial-intelligence spending ahead of results from Microsoft, Amazon, Meta and Apple. The S&P 500 was little changed, while its technology sector fell 0.88% as chip stocks retreated. Sentiment had softened after Alphabet announced a sharp increase in capital expenditure despite continued cash consumption. Economic data showed that US services activity accelerated in July, partly supported by FIFA World Cup and Independence Day spending, while manufacturing growth slowed to its weakest pace since March. Trading activity was subdued, with 15.03 billion shares changing hands across US exchanges versus a 20-session average of 18.22 billion.

Asian Market Summary

Asian equities responded cautiously on Monday as a pause in Gulf fighting pushed oil prices lower, easing inflation concerns and supporting bonds ahead of a week of central-bank decisions and earnings releases. In China, CXMT surged 470% on its Shanghai debut in Asia’s largest initial public offering this year, becoming the country’s most valuable chipmaker despite recent weakness in global technology shares. Shein reported a $99 million first-quarter loss for 2026, reversing a $395 million profit a year earlier, as slower sales followed the removal of a US import-duty exemption and a sizeable accounting charge. Chinese industrial profits grew, although more slowly, as resilient exports offset weak domestic demand, while consumption and property-sector softness sustained expectations for further policy support.

Commodity Market Summary

Gold advanced more than 1% on Monday as a pause in Middle East hostilities reduced inflation concerns and investors awaited the US Federal Reserve’s policy decision. Oil prices fell 5% after the United States and Iran suspended strikes following two weeks of attacks, raising expectations that diplomacy could ease tensions and restore shipping through the Strait of Hormuz. Brent had previously reached $100 per barrel as disrupted Hormuz flows and Red Sea instability constrained exports, including Saudi shipments through the Bab el-Mandeb strait. However, shipping remained severely restricted, with fewer than 10 commodity vessels transiting Hormuz daily over the weekend. Traffic through Bab el-Mandeb also declined after Houthi attacks on Saudi oil installations, underscoring persistent supply risks despite the pause.

Currency Market Summary

Currency markets reflected diverging monetary-policy and geopolitical signals. The South African rand extended Thursday’s losses on Friday, approaching R17 per dollar for the first time since April after the South African Reserve Bank unexpectedly held interest rates unchanged. Sterling was set to end a three-week advance as softer inflation and escalating Middle East risks encouraged investors to reduce positions before the Bank of England meeting. The US dollar weakened at the start of Asian trading on Monday after Washington paused its bombing campaign in Iran, supporting risk appetite and lowering oil prices. The dollar index declined 0.25% to 101.23. Traders increased expectations that the Federal Reserve could raise rates at its meeting, although the implied probability remained unchanged from Friday.

Domestic Company News

Premier Group Limited (PMR) +0.16%
Premier Group confirmed that the Public Investment Corporation has increased its beneficial holding in the company to 10.32% of issued ordinary shares following an additional acquisition. The transaction lifts the PIC above the 10% ownership threshold, strengthening its position as a significant institutional shareholder in the consumer staples group. Premier disclosed the change under section 122 of the Companies Act, regulations and JSE Listings Requirements, and submitted the prescribed notice to the Takeover Regulation Panel. The announcement does not alter Premier’s operations, earnings outlook, capital structure or balance-sheet position, but the higher institutional ownership may be relevant to investors assessing shareholder concentration, voting influence and free-float dynamics. The board accepted responsibility for the accuracy and completeness of the disclosed information.

Vukile Property Fund Limited (VKE) -0.46%
Vukile Property Fund announced board and committee changes linked to its continuing succession and refresh programme, effective from its annual general meeting on 2 September 2026. Dr Renosi Mokate will step down as Lead Independent Director and leave the audit and risk committee, while remaining on the board and retaining her environmental, social and ethics and remuneration committee roles. James Formby will become Lead Independent Director while continuing to chair the remuneration and human capital committee and serve on the audit and risk committee. The committee will comprise Neo Dongwana as chairperson, alongside Tshidi Mokgabudi and Formby. Following its latest independent evaluation, the board reaffirmed the independence of the committee members and directors standing for re-election at the forthcoming AGM.

Global Company News

American Express Company (AXP) -4.30%
American Express raised its 2026 revenue growth forecast to 10% after second-quarter revenue increased 10% to $19.6 billion, supported by resilient spending among affluent cardholders. Earnings of $4.53 per share exceeded the $4.40 consensus estimate, while billed business rose 9% to $455.8 billion and travel and entertainment spending advanced 10%. However, the company retained full-year earnings guidance of $17.30 to $17.90 per share, prompting investor concern as consolidated expenses climbed 12% to $14.5 billion amid intensifying competition for premium customers. The unchanged profit outlook overshadowed the earnings beat and improved revenue guidance. American Express also agreed in June to acquire restaurant-booking platform TheFork for $700 million, extending its dining and lifestyle offering and reinforcing focus on premium customer engagement globally.

Verizon Communications Inc. (VZ) +5.84%
Verizon raised its 2026 adjusted earnings forecast to $4.99–$5.04 per share from $4.95–$4.99 and increased expected free cash flow growth to 9%–10%, supported by cost controls and lower device subsidies. Second-quarter adjusted earnings of $1.30 per share exceeded the $1.27 consensus, while 184,000 postpaid wireless additions surpassed expectations of 103,900. Revenue of $34.3 billion nevertheless missed the $35.16 billion estimate as weaker handset upgrades reduced equipment sales. Strategically, Verizon secured a dark-fibre agreement worth more than $1 billion with Google to connect data centres, creating a new infrastructure revenue channel linked to artificial-intelligence investment. Management expects further agreements by year-end that could generate several billion dollars over subsequent years, complementing simplified plans and bundled wireless-broadband offerings and supporting subscriber growth.

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