PDSNET Market Snapshot

Wall Street’s relationship with Trump is evolving. At the start of his current term, when he was playing with the US tariff system, everything he said moved the markets. Today, tariffs have completely lost their force in the market and Trump has moved on to being a warmonger instead.

His attack on Venezuela did not move the markets, but it boosted his confidence and made him easy prey for Israel’s Netanyahu, allowing him to embroil the US in a war which does absolutely nothing for America and has certainly damaged Trump’s mid-term election prospects beyond repair.

The US/Iran war has reached a stalemate with both sides closing the Strait of Hormuz and both sides seizing commercial ships in the vicinity. What is interesting is that while the price of North Sea Brent oil has now climbed back above $105 per barrel, the S&P500 index has made yet another new all-time record high.

Investors are clearly looking beyond the oil price to the excellent results and predictions coming out of S&P500 companies, and especially the “magnificent seven”. Consider the chart:

The chart shows the previous 5% correction in November last year and then Trump’s Iran war correction which broke to a lower low and created the opportunity for a TACO trade. You will note the important hammer formation on 7th April 2026 which gave a clear early warning that a strong recovery was coming. Note also that the 50-day moving average turned upwards again, away from the 200-day – indicating that a death cross had been averted.

The general investor perception is that the Iran war is a temporary phenomenon which will be resolved one way or another relatively soon. The primary impact of the higher oil price, while negative for the economy, has been to seriously erode Trump’s MAGA support base. It is also having the effect accelerating the movement away from fossil fuels towards renewables.

There is now concrete evidence that somebody in Trump’s camp has been profiting massively from his announcements on the war in Iran. There are three clear instances of insider trading in the oil futures market coming immediately prior to his announcements:

1. On 23rd March 2026, a $500m short placed 15 minutes before Trump announced a delay in Iranian strikes.
2. On 7th April 2026, a $950m short placed immediately before Trump announced the US-Iranian ceasefire.
3. On 17th April 2026, a $760m short, placed minutes before the opening of the Strait of Hormuz was declared by Trump.

The Commodity Futures Trading Commission (CFTC) is investigating these trades.

MAGA has been blithely unconcerned about the fact that Trump is inter alia a convicted criminal, a rapist, an inveterate liar or that he and his minions have been engaged in blatant insider trading. MAGA is, however, very much concerned about the price of petrol (“gas”) which has remained stubbornly above $4 per gallon since the war began.

At the same time, the stock market is bracing for the biggest wave of initial public offers (IPO) in its history with SpaceX, Open AI and Anthropic all planning to come to the market later this year. They are endeavouring to raise a total of $3 trillion led by SpaceX’s $1,75 trillion offer. Open AI is looking for about $1 trillion and Anthropic wants $380bn. What is interesting about this is that all three companies are currently running at a loss. Space X, particularly, reported a loss of $5bn last year on revenues of $18,6bn.

This almost looks like the start of a top-of-market listings boom. Investors are losing sight of the underlying fundamentals and focusing only on blue sky potential. With its latest all-time record high last Friday, the S&P500 is now trading at an historical price:earnings ratio (P:E) above 30 – which must be compared with the median average for that index of between 15 and 18. In other words the index is discounting a substantial increase in earnings for its component companies.

Can that be justified? We believe that it can. There is little doubt that the productivity benefits of AI have only just begun to impact the profits of S&P500 companies – let alone other emerging new technologies like humanoid robotics. We believe that the bull trend will continue – but your best defence against a market collapse remains your stop-loss strategy.

Now that the TACO trade associated with Trump’s war in Iran is over and markets are again posting new all-time record highs, it is worth noting that the JSE has not yet recovered completely and the JSE Overall Index (J203) is still 5,6% below its record high of 128456 made on 27th February 2026.

As an emerging market, the JSE always tends to be more volatile than first world markets – which means it falls further and goes higher. The JSE fell a total of 14,3% during this correction where the S&P500 fell by only 8,8%. It is also important to understand that the markets of the world (including the JSE) always tend to follow Wall Street – so we should expect the JSE Overall index to break to a new record high fairly soon. Consider the chart:

Our Winning Shares List (WSL) is still dominated by commodity shares like Sasol, Pan African, Southern Palladium and Anglogold, so there are still investment opportunities to be found among the blue-chip industrials and financials.

One such blue chip is PSG Financial Services (KST). KST has been spun out of PSG which has spawned many very successful JSE listings like Capitec, and Curro. KST is a thoroughly South African company that has a long track record of excellent performance.

Its business consists primarily of asset management and insurance. In its results for the year to 28th February 2026 the company reported R540bn of assets under management (AUM), up 20% from the year before. It also reported its gross written premiums up 5% to R8bn. The company’s core income increased by 22% to R8,28bn and its recurring headline earnings per share (HEPS) rose by a whopping 34%. These are excellent results. Consider the chart:

KST has been in a steady upward trend since March 2024. We added it to the Winning Shares List (WSL) on 23rd May 2024 at 1610c and since then it has nearly doubled to 2865c.

Like most blue-chip shares trading on the JSE, KST shares fell as a result of the war in Iran and the sharp rise in the price of oil. That sell-off gave private investors a rare opportunity to buy further in to this excellent company.

As a private investor it is important to understand that KST is a services company and has an insignificant working capital requirement, while much of its income is annuity income. Its staff are also highly educated and paid – which means that they are not unionised. Given its long track record of generating profits, this makes it an almost risk-free investment.

Of course, we are not the only ones who are aware of KST’s great performance. The institutional fund managers have long favoured its shares and as a result the shares trade for a relatively high P:E ratio of 21,22 – which compares with the JSE Overall indexes average P:E of 15,34. Nonetheless, it is a good share to accumulate during periods of weakness.

The S&P500 index ended last week just 2,3% below its all-time, record high of 6978.6 made on 27th January 2026. It is apparent that the V-bottom caused by Trump’s war in Iran is almost over. We anticipate a new record high on the S&P within the next few weeks. Consider the chart:

In the end, the Trump’s Iran war took the S&P down 8,8%. It did not even fall sufficiently (10%) to be considered an official correction. All markets have periodic corrections and Wall Street was overdue for a downward move at the time that this happened. You will note that the 50-day moving average did not break down through the 200-day moving average – so there was no death cross. And now the 50-day has started to move up again. The hammer formation which occurred on 7th April was probably the clearest indication that the market was returning to normal.

From an investor’s perspective, the result of the US/Israel war in Iran has come down to a temporarily raised oil price. Trump has predictably folded and backed down on all his bombastic rhetoric, leaving other people to clean up the mess. As the dust settles, we expect that the price of North Sea Brent will drift back down and eventually fall below resistance at $60 per barrel. The rand will resume its strengthening trend and the focus of the markets will return to the productivity gains flowing from AI.

One of the great understandings in the markets is that whatever happens, no matter how disastrous it may seem at the time, there is always a way for you as a private investor to turn it into a profitable investment. You just have to understand what is happening and then decide on the best way to position your capital to benefit. You must always see the situation as an opportunity and take advantage.

We really hope that you took our advice and profited from Trump’s war in Iran. Over the past month, we have run four articles about the situation in Iran and advised you as follows:

1. In our article on 9th March we said, “...the war in Iran will be resolved on some basis - probably because he (Trump) will probably back down in the face of increasing pressure both at home and abroad. If this happens in a relatively short time, the market will turn its attention back to the rapid progress of new technologies and hopefully recover to make a further new all-time record high in due course”. 
   
   
2. In our article on March 16th we said, “We believe that the situation will be resolved and that some degree of normalcy will return sooner or later. When and if that happens, we expect stocks around the world to bounce”.
   
   
3. In our article on March 23rd we said, “So, we see this sell-off on the JSE as a buying opportunity to pick up high-quality shares at bargain prices” and “Buying shares at a time like this can be scary, but remember our maxim: If you don’t feel the risk, then you are probably not going to make any money”.

4. In our article on 6th April we said, “The impact of artificial intelligence on productivity levels worldwide is a far more important trend and will continue to push markets up for years to come. In the context of that, Trump’s foray into Iran is a mere “bump in the road”. You should take this opportunity to buy high-quality blue-chip shares while they at these low levels”.