PDSNET Market Snapshot

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”. 

It is always worth stepping back to look at where the markets are over the long-term. It helps you to view current events within their historical context to obtain some perspective. Consider the following chart of the JSE Overall index going back to February 1985:

What you are looking at here is the history of the past 41 years. I have marked on the chart the 1987 crash, the 1998 dot com crash, the 2008 sub-prime crisis, the impact of COVID-19, and now Trump’s Iran war.  Obviously, the chart is semi-logarithmic because on a linear chart, events from the remote past, like the 1987 crash, become almost invisible, while current events, like the war in Iran, would assume a disproportionate importance.

From a long-term technical perspective, I have always viewed the downward spike associated with COVID-19 to be an “aberration” because it was not caused by economic events. Rather, it was a once-off, black swan event that resulted in a sharp and short-lived V-bottom. As soon as it became apparent that the pandemic would be controlled, the markets resumed their upward trend.

Disregarding this aberration, it is clear that the JSE Overall Index has been moving between two almost parallel upward sloping trendlines. These are known to technical analysts as channel lines and they show where the market is now in terms of its past extremes.

Perhaps what stands out the most from this chart is just how insignificant the impact of the Trump war in Iran really is. At the worst point, on 20th March 2026, events in Iran took our market down a total of 14,3% - and it had even less impact on Wall Street where the S&P500 came off by only 9,1%. This difference is as it should be because the JSE represents emerging markets generally and is always more volatile than Wall Street.

It has become apparent that Trump, in his second term, set out to try and roil markets, and especially Wall Street, as much as possible. His first efforts came in the form of a wild and inconsistent tariff policy which impacted markets - until investors became inured to his on again, off again policies. Then the TACO trade became a feature of Wall Street where traders capitalised on his repeated and predictable propensity to back down.

Seeing that tariffs no longer had the power to move the market he resorted to foreign invasions. He talked about invasions of Greenland and Canada, but the idea of going to war with America’s erstwhile long-term allies proved to be too much even for his sycophantic staff. So, he invaded Venezuela and executed a leadership change there.

This event went very smoothly, but disappointingly it did not have a major impact on Wall Street. So, encouraged by the "success” of his leadership change in Venezuela, and egged on by Israel’s President Netanyahu, he decided to try something much more dangerous – the attack on Iran. Without considering the consequences, he arranged for the assassination of the spiritual leader of 250 million Shiite Muslims.

By so doing he has set in motion a chain of events that can only be bad for Americans worldwide – and which has short-term negative consequences for everyone on the planet.

Despite this, we see two positives coming out of this mess:

1. It will probably lead directly to the end of the MAGA movement and Trump’s influence. MAGA supporters have shown that they are completely unconcerned about Trump’s criminal convictions for fraud, his abuse of women, his January 6th insurrection and by his persistent lying, but that the increase in the “gas” price to above $4 per gallon in Texas is simply unacceptable.  
2. It will sharply accelerate the world’s move away from fossil fuels generally. The world economy has been moving steadily towards renewables ever since they became cheaper than their fossil fuel alternatives – but the doubling of the oil price has made that move an imperative.

Like all events which impact directly on the stock market, Trump’s war in Iran provides an opportunity for private investors to capitalise.

Oil prices will probably remain high for the rest of this year, but they will gradually come down as markets find other sources of energy and find ways around the bottleneck in the Strait of Hormuz.

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. 

The news from various sources that the US is preparing to send thousands of marines and large quantities of military hardware to the Middle East is unsettling markets around the world. Combined with Iran’s efforts to disable oil production in adjacent countries in the Persian Gulf, these 2 factors have caused the S&P500 to fall 1,5% on Friday last week and brought it closer to a correction (generally accepted as 10% below the high point). 

The evidence is that Trump and America are getting ready to put boots on the ground in Iran with the idea of the protecting shipping passing through the Strait of Hormuz. The Iranian coastlines on the Persian Gulf and the Gulf of Oman will be very difficult to control and protect because they are overlooked by the Zagros mountains and the Central Iranian range. These mountains, which have many cave systems, will be ideal cover from which small groups of Iranian commandos can constantly harass the invaders in the coming months.  

In these troubled times the JSE Overall index has so far fallen 14,3% - twice as much as the 7,2% fall in the S&P500. This is as you would expect given that South Africa is a leading emerging market and our currency reflects the general worldwide shift towards risk-off. The imminent rise in our petrol price on 1st April could be as much as 25% or R5 per litre. This will push our inflation rate up and probably cause local interest rates to rise.

What is surprising in this scenario is that markets and especially Wall Street have not fallen further. This is because the tech companies in the US are still attracting enormous investor interest and there has been substantial “buying of the dips”. The general opinion of overseas analysts is that shares will bounce back from this correction before the end of this year.

Is this a reasonable assumption? In our view the short answer to the question is, “Yes”. Trump is well known for backing down and not sticking to anything when the pressure on him rises. In this case he is already coming under enormous pressure from both external sources and internally where his popularity has never been as low. With the mid-term elections due in November, he must be increasingly aware of the dire consequences of losing both the House and the Senate.  If he puts boots on the ground in Iran now, he will certainly still be getting a steady flow of body bags back from Iran by November. And we believe it is unlikely that his efforts will make the Strait of Hormuz safe for shipping. But he is Trump and therefore totally unpredictable.

In these troubled times, there are relatively few companies which are not touched in some way by what is happening in the Middle East, and especially by the rising oil price. Mobile Telephone Networks or MTN as it is known is one of those companies. It describes itself as a “...pan-African mobile operator with the strategic intent of leading digital solutions for Africa's progress”.

In its most recent results for the year to 31st December 2025 the company reported service revenue up 22,9% and data revenue up 37,7%. Fintech revenue rose 30% and the company reported a 5,6% increase in total customers to 307,2 million.

Technically, the share was in a sideways market from March 2024 until the beginning of 2025. It then entered a strong new upward trend. Consider the chart:

We added MTN to the Winning Shares List (WSL) on 15th January 2025 at a price of 9729c. Since then, it has risen to 19155c – or about 88%. While it has certainly felt some of the fall-out from the Iran war, its business is in Africa which should be largely unaffected.

So, we see this sell-off on the JSE as a buying opportunity to pick up high-quality shares at bargain prices. MTN is one of those shares, but others include Clicks which has now fallen even further due Trump’s war, but which was already heavily oversold.

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”.

Your ultimate protection in all of this is, of course, as always, your stop-loss strategy.