ARTICLES

Overview - 10th November 2025

Wall Street

Two weeks ago we suggested in an article that a stock market bubble was developing in AI and predicted that a significant correction was imminent. We repeated that view in the Confidential Report published on Wednesday, 5-11-25 last week [link].

The S&P500 index is now in the midst of another mini-correction which has already taken it down 2.5%. That is about average for the mini-corrections that we have seen over the past six months and so the bulls were back in the market on Friday, furiously buying the dip. Their activities resulted in a day’s trade which came very close to a hammer formation. Consider the chart:

As you can see, there have been five mini-corrections in the past six months, each taking the S&P down by roughly 1.5% -3%. In each case the bulls prevented a major correction by energetically buying the dip and pushing the market back up to a new record high. The current correction looks quite similar – but sooner or later there is going to be a correction which will overcome the bulls’ enthusiasm and carries the S&P down much further. 

The Rand

The daily fluctuations of the rand against the US dollar have become a fairly accurate indicator of where the S&P is likely to go on a day-to-day basis. If the rand strengthens rapidly then you can be fairly confident that the S&P will open stronger and have a good day. A strengthening rand indicates that international investor sentiment is moving back towards risk-on and the search is on for high return emerging market assets. The opposite is also true. So before the US markets open at 4.30pm South African time, take a look at the rand and see what has happened to it during our trading day. The following chart is available at https://www.forexforecasts.co.za/resources/live-charts/

You can see here that the rand has been strengthening rapidly since 5^th November 2025 and is around R17.29 to the US dollar. This strength, combined with the hammer formation on the S&P last Friday suggests that the mini-correction may well be over and we can probably expect Wall Street to rally on Monday, 10-11-25. But remember that forex markets like this one can move very quickly – so you need to make sure that the rand is still in strengthening mode right up until the US markets open.

Pokrovsk

You may wonder what relevance the war in Ukraine has for a private investor on the JSE. It has no direct relevance – and yet in some ways it is perhaps the most important conflict of our time. In our view, our way of life, our democracy and the mixed capitalist economy that we invest in are ultimately at stake. In the end, if autocracy is allowed to succeed in Europe, then democracy and the economic freedoms which capitalism allows and which we all enjoy, will eventually be diminished and lost. Dictators have no use for any type of individual economic freedoms.

The war in Ukraine has now become a war of attrition. Without support from Trump and facing unrelenting attacks on his oil industry, Putin desperately needs a public relations win at home in Russia. Russians are facing fuel shortages, very high inflation and interest rates. The war is increasingly being seen as ruinous for the economy and resulting in massive casualties without any significant gains. Putin has chosen the city of Pokrovsk and instructed his forces to do everything possible to take it.

So, the Russian armed forces are throwing everything they have at the capture of Pokrovsk. Their problem is that the Autumn weather has turned the battlefield to mud where all types of ground vehicles are basically immobilised. It has become very difficult for both sides to re-supply their troops and this tends to have the effect of making any significant advance by either side very difficult and expensive. Over the past year Russia has managed, at great cost in men and military hardware, to virtually surround the city of Pokrovsk and there remains just a narrow corridor where the Ukrainians can still move in supplies and evacuate wounded soldiers.

The Ukrainians, seeing the Russian encirclement, have now attacked one of the surrounding salients forcing the Russians to divert troops to defend it and taking pressure off the troops who are defending the inner city. The Ukrainian strategy is to make every meter of ground taken very expensive for the Russians. If the Russians manage eventually to take Pokrovsk it will have been a very expensive victory.

Adding to Putin’s problems, Russian troop morale is at a very low level. The Ukrainians are having considerable success in persuading Russian soldiers to surrender by sending out drones with loudhailers and pamphlets which encourage them to surrender to the nearest Ukrainian outpost. This is a tactic, which proved successful in the First World War, when conditions in the trenches became unbearable and is now resulting in notable surrenders of Russians.

In our view, the war in Ukraine is close to its end – mainly because Russia simply does not have the resources to continue maintaining the current level of pressure. Putin is a dictator, but even dictators ultimately need at least some level of popular support to remain in control. Our prediction is the Pokrovsk might will turn out to be Putin’s Hougoumont which tied up Napoleon’s troops in the battle of Waterloo, ultimately leading to his defeat.

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PDSNET ARTICLES

Bubble

Last Friday the S&P500 reached another new all-time record high, closing at 6791 and reaching a new intra-day record high of 6807. This is obviously an exciting time for private investors, but with each new record high the systematic risk of a bear trend or crash increases. Consider the chart:

The PEG Ratio

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Possibly the best indicator of that is the 28% rise in the JSE Banking index which, before the GNU had

Rare Earth Elements

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US Shutdown

There has been much in the media recently about the US government shutdown and the fear among investors that it might begin to affect the stock market, depending on how long it lasts.

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New Listings

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Exponential Growth

The  S&P 500 index is important because all the stock markets around the world tend to follow it. If the S&P is in a bull trend then London, Tokyo and the JSE will also be in a bull trend – and vice versa.

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The US Jobs Market

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Jackson Hole

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Choppies

Choppies is a supermarket chain which operates in Botswana, Namibia and Zambia. It is listed both on the Johannesburg Stock Exchange (JSE) and on the Botswana Stock Exchange (BSE). Notably, the company has resisted the temptation to re-enter the highly competitive and cut-throat retail market in South Africa, having exited that market in 2020 due to sustained losses. Despite

Gold Resistance

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