| Prices are rising at their slowest pace in close to 16 years, which is hardly surprising given the impact of the Covid-19 lockdown on the ability to shop and on consumers' pockets. The consumer price index increased by just 2.1% in May following April's 3% rise. That's the lowest reading since September 2004. Apart from the impact of lockdown restrictions on demand for goods and services, the petrol price declined on the back of a lower oil price. Food inflation, however, increased slightly to 4.8% from 4.6%. Despite the benign inflation numbers, after slashing interest rates by 275 basis points so far this year, Investec says it expects the Reserve Bank to leave rates unchanged when its Monetary Policy Committee meets next week due to the improving global economic environment. One company that has suffered from reduced demand is Truworths. The retail group has outlined the impact the lockdown has had on sales this year - both in SA and at its Office chain of shoe shops in the UK. Its shares rose yesterday, indicating that the numbers may not have been as bad as the market expected. Meanwhile, as Tiger Brands prepares for a deep and prolonged recession and changing buying patterns, it will soon have a new chief financial officer to guide it through the turmoil. Read on to find out who is taking over from Noel Doyle, who was promoted to CEO back in February. Also today, Bell Equipment has warned of a sharp decline in earnings as Covid-19 and lockdown conditions impacted demand for its articulated dump trucks and earthmoving machinery. And if you own shares in Quantum Foods you'll be a little richer this week following the steady rise in its share price, which closed at an all-time high yesterday. Finally, my apologies that you haven't received your newsletter for the past couple of days - there was a gremlin in the system which we hope has been sorted out. I hope you have a good day. Stephen Gunnion Managing Editor, InceConnect
Latest from Ingham Analytics - "US data provides a chink of light in Covid-19 gloom" Savings rates in the United States have mushroomed, say Ingham Analytics (unlike in South Africa). Why should this be so? They point to a couple of dynamics at place, which may take you by surprise at a time of gloomy media headlines. Fascinating data is presented on durables sales but most surprising is data on personal consumer spending, disposable personal income and personal savings. With the US economy remaining the engine room of world consumption, there are interesting seeds in these numbers that have implications elsewhere. There is talk of a V, L, W and other alphabet soup style recovery. "US data provides a chink of light in Covid-19 gloom" gives food for thought. On Monday, Ingham Analytics released "(I)n (M)y (F)ace.....and yours", a pun in the title on the International Monetary Fund and what that institution could play - or not play - at a time when South Africa is perilously close to imminent bankruptcy - a debt trap - of its own making. Hardly surprising the country now has punishingly high nominal and real ten-year bond yields. As they have warned for months, the big four banks are likely to be worst affected under whatever scenario. Two notes last week are also worth a read in this context, "Fighting inflation" and "Rating retreat". | 