PDSNET Market Snapshot

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.  

Are we teetering on the edge of a major bear trend? After Friday the 13th of March 2026's S&P500 close at 6632, Wall Street is now down 5% from its all-time record closing high of 6978.6 on the 27th of January 2026. This down-move is similar to the 5% correction which occurred in the first three weeks of November last year and it is evident that there is still considerable bullish sentiment in Wall Street, just waiting for their moment to buy the dip .

Into this mix, Oracle (ORCL) delivered strong Q3 FY2026 results on March 10, 2026, beating estimates with $17.2 billion in revenue, driven by a 243% surge in AI infrastructure demand. This demonstrates that the underlying strength of the AI boom in the US is still alive and well. If the war situation in Iran can be resolved, it is clear that the stock market will continue up to new record highs very quickly. Consider the chart:

The chart shows the November correction and what some technicians are now suggesting is a head-and-shoulders formation. In our view, the formation is not particularly convincing, but after Friday’s move there can be no doubt that the index has broken strongly down.

Most of the problem comes from the jump in the oil price which has seen North Sea Brent rise to above $100. This is very good for Russia and Putin, while being very bad for Trump. The US Secretary for Defence, Pete Hegseth, seems to think that the problem is easily solvable, but we believe that it may be extremely difficult.    

Normally, about 20% of the world’s oil passes through the Strait of Hormuz. This narrow sea passage is relatively easy to attack and control, and it is Iran’s only strong pressure point in its war with Israel and America. Its navy and air force have now been systematically eliminated by strategic bombing. The new leader of Iran, Mojtaba Khamenei, has specifically said that he will not allow any ships to pass through and that he will use the rising oil price to put pressure on Trump.

The problem is that to open the Strait will require boots on the ground in Iran. The Israeli/US forces will have to clear a corridor at least 30km wide along the Iranian coast adjacent to the Strait to prevent the firing of missiles and drones against passing ships. They cannot do this from the air. Having boots on the ground means incurring casualties.

Trump probably began this war in order to draw attention away from his problems with the Epstein files. He has however landed himself with a new problem – the rising price of petrol in America. His approval ratings have fallen to an all-time low and the November mid-term elections are looming large. The price of petrol has risen by 20% since the start of the war. On the other hand, his tax cuts will begin to impact in April resulting in refund cheques being paid after the tax-filing season ends.

On Feb. 7, 2026, Chasity Verret Martinez won a special election to fill a vacant seat in the Louisiana House. Martinez is a Democrat who took 62% of the vote in a district that had given Donald Trump a 13-percentage-point victory in the 2024 presidential race. And her win came a week after Democrats seized a Texas Senate district that had supported Trump even more strongly.

While these results are not conclusive, they are a strong indication that the Republicans will lose their control of the House and may even lose the Senate in November. Trump knows that, if he loses both Houses, he could easily be looking at impeachment – so suddenly control over the shipping passing through the Strait of Hormuz becomes critical.

How should you as a private investor respond to this situation? Our advice is not to panic but to monitor your stop-loss levels closely and act on them when broken. 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.