Home Depot Beats Expectations on Resilient Demand

Market Commentary

South African Market Summary

South African equities weakened on Tuesday, with the JSE All Share index falling 1.18% to 113,323.45 and the Top 40 declining 1.24% to 105,634.97. Absa Group reported an 8% increase in half-year headline earnings, supported by higher revenue and lower credit impairment charges. Business confidence improved in July, although inflation pressures and uncertainty linked to the Iran war continued to weigh on sentiment. Investors are awaiting July inflation data on Wednesday, with economists expecting annual inflation to ease to 4.5% from 5.0% in June. Separately, government proposed a major overhaul of the electricity-tariff framework, including 10-year pricing forecasts, unbundled tariffs and broader negotiated pricing agreements.

European Market Summary

European equities weakened on Tuesday as higher bond yields, renewed inflation concerns and Middle East uncertainty pressured sentiment. The STOXX 600 fell 0.69% to 651.90, its lowest level in more than two weeks and worst session in nearly a month. German investor confidence improved more than expected, with the ZEW sentiment index rising to 34.2 in August. Huber+Suhner dropped 11.4% after weaker-than-expected core profit and communications orders. In the UK, the FTSE 100 stabilised after six consecutive declines as healthcare and energy shares provided support. Labour-market data showed cooling wage growth and vacancies at a five-year low, while grocery inflation eased to its lowest level since October 2024.

US Market Summary

Wall Street closed lower on Tuesday as semiconductor and technology shares retreated amid rising bond yields and renewed Middle East uncertainty. The Philadelphia SE Semiconductor Index fell 5%, while information technology declined 1.9%, making it the weakest-performing S&P 500 sector. Higher oil prices and fading hopes for a Middle East peace agreement pushed the US 30-year Treasury yield to its highest level since 2007, while the 10-year yield reached its highest since January 2025. Home Depot slipped 0.1% despite beating second-quarter sales expectations. Investors are now focused on Federal Reserve meeting minutes due Wednesday, upcoming results from Walmart and Nvidia’s quarterly report as key tests for consumer resilience and AI-driven market momentum.

Asian Market Summary

Japan’s benchmark government bond yield approached 3%, a level not seen since the mid-1990s, as inflation, fiscal concerns and expectations for monetary policy continue to reshape the country’s bond market. In China, humanoid robot maker Unitree surged nearly six-fold on its Shanghai trading debut, marking a significant listing for a robotics sector that has become an important area of Sino-US technology competition. The debut is also expected to provide a benchmark for other Chinese humanoid robotics companies preparing to list. Elsewhere, South Korea’s military said it would reduce its annual joint military exercise with the US by about half after President Donald Trump ordered the Pentagon to scale back the drills.

Commodity Market Summary

Gold prices edged higher in early Asian trade on Wednesday as US Treasury yields eased from recent highs, with investors awaiting minutes from the Federal Reserve’s latest policy meeting. Oil prices also advanced for a fourth consecutive session as uncertainty over shipping through the Strait of Hormuz continued to support the market. President Donald Trump said the waterway was open and that no talks with Iran were under way, contradicting Tehran’s position that shipping remained restricted. Iraq approved alternative crude-export mechanisms to reduce reliance on the Strait. In the US, industry data showed crude and distillate inventories fell last week, while gasoline stocks increased. Analysts expect official data to show crude inventories declined by about 600,000 barrels.

Currency Market Summary

The South African rand was steady on Tuesday as heightened Middle East tensions and weaker gold prices weighed on the risk-sensitive currency ahead of domestic inflation data due Wednesday. Sterling edged lower after UK labour-market data showed unemployment above expectations in June and vacancies declining in July. The US dollar remained near multi-month lows against major peers on Wednesday as Treasury yields eased, with the dollar index marginally lower at 99.65. The benchmark US 10-year Treasury yield fell to 4.702%, while the 30-year yield declined to 5.282%. The Japanese yen was little changed at 159.56 per dollar, remaining stronger than its multi-decade low near 164. Investors are awaiting Federal Reserve meeting minutes for further interest-rate guidance.

Domestic Company News 

BHP Group Limited (BHG) +0.85%
BHP reported a 30% increase in full-year underlying attributable profit to US$13.20 billion, exceeding the US$12.66 billion consensus, supported by record copper prices. Copper and associated by-products generated US$18.19 billion in operating earnings, surpassing iron ore’s US$14.53 billion to become the group’s largest earnings contributor. The miner declared a final dividend of US$0.99 per share, lifting the full-year distribution to US$1.72, its highest in four years. Net debt fell to US$8.69 billion, below BHP’s US$10–12 billion target range. Management expects annual copper demand to exceed 50 million tonnes by 2050 and said its project pipeline could lift copper production by up to 40% by 2035, underscoring copper’s growing strategic importance to the portfolio.

Absa Group Limited (ABG) -0.22%
Absa Group reported a 7.9% increase in headline earnings per share to 1,545.4 cents for the six months ended 30 June 2026, while basic earnings per share rose 12.1% to 1,517.9 cents. Total income increased 4.1% to R58.79 billion and return on equity improved to 15.0% from 14.8%. Gross loans and advances grew 5% to R1.54 trillion, while deposits and debt funding rose 8% to R1.91 trillion. The Stage 3 loans ratio improved to 5.30% from 5.90%, although the cost-to-income ratio edged higher to 53.4%. Common Equity Tier 1 strengthened to 12.8%. Absa declared an interim dividend of 850 cents per share, up 8.3% from 785 cents.

NEPI Rockcastle NV (NRP) -1.27%
NEPI Rockcastle reported distributable earnings per share of 32.14 euro cents for the six months ended 30 June 2026, up 3.5% year on year, and raised full-year guidance. The group now expects 2026 DEPS to increase by 3.5%–4% from 62.03 euro cents in 2025. Net operating income, including energy activities, rose 3.8% to €318 million, while like-for-like tenant sales increased 2.7% and occupancy remained high at 98.2%. The portfolio recorded a €126 million fair-value gain, taking its value to €8.4 billion. Loan-to-value was 33.1%, below the 35% strategic threshold. The Board declared a 28.93 euro cent interim dividend, representing a 90% payout ratio.

ASP Isotopes Inc. (ISO) -2.03%
ASP Isotopes said wholly owned subsidiary Quantum Leap Energy is evaluating metal conversion opportunities in Namibia, including a proposed pilot-scale hydrofluorination and fluorination facility near Walvis Bay. A public environmental and social impact assessment and consultation process has commenced in accordance with Namibian regulatory requirements. The facility would be used to develop, test and demonstrate hydrofluorination and fluorination processes for metals. The evaluation remains at an early stage and no final investment decision has been made, with any development subject to technical, commercial, environmental and regulatory reviews and approvals. Quantum Leap Energy focuses on technologies spanning uranium conversion, uranium-235 enrichment, lithium isotope separation and radioactive waste treatment across the nuclear fuel cycle.

Global Company News

Home Depot Inc. (HD) -0.12%
Home Depot reported second-quarter sales of US$47.86 billion, up 5.7% and ahead of the US$47.27 billion consensus, while adjusted earnings per share of US$4.92 exceeded expectations of US$4.73. Comparable sales increased 1.7% overall and 1.3% in the US, supported by resilient demand for repair and maintenance despite continued weakness in larger renovation projects. The retailer maintained its full-year sales and profit forecasts, with tariff refunds expected to help offset higher fuel and other input costs. Second-quarter tariff refunds reduced cost of goods sold by US$685 million. Home Depot is also expanding its contractor-focused offering and rolling out three-hour Express Delivery nationwide for professional and do-it-yourself customers.

Keysight Technologies Inc. (KEYS) -5.58%
Keysight Technologies forecast fourth-quarter adjusted earnings of US$3.34–US$3.40 per share and revenue of US$1.93–US$1.95 billion, ahead of analyst expectations of US$2.70 and US$1.81 billion, respectively. The outlook reflects continued demand linked to AI-driven data-centre expansion. Third-quarter revenue rose 36.5% to US$1.85 billion, exceeding the US$1.74 billion consensus, while adjusted earnings of US$3.07 per share beat expectations of US$2.48. Communications Solutions revenue increased 43%, supported by 56% growth in commercial communications and 14% growth in aerospace, defence and government. The segment contributes roughly two-thirds of group revenue. Keysight shares rose nearly 5% following the stronger-than-expected results and outlook.

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