vestact posted: " Market Scorecard US markets advanced for the fourth day in a row yesterday with both the S&P500 and the Nasdaq closing at record highs. In the last 31 years, there have only been nine instances where the S&P500 returned gains of more than "
US markets advanced for the fourth day in a row yesterday with both the S&P500 and the Nasdaq closing at record highs. In the last 31 years, there have only been nine instances where the S&P500 returned gains of more than 10% in the first eight months of the year, showing how special this recovery has been.
In company news, Pfizer announced a buy-out of Trillium Therapeutics for $2.26 billion. Trillium is a Canadian biotech company which develops drugs to boost the immune system to fight cancer. Elsewhere, Vestact's favourite security software company CrowdStrike closed up 8% after news that it will soon be added to the Nasdaq-100 index.
In summary, the JSE All-share closed up 0.93%, the S&P 500 closed up 0.15%, and the Nasdaq closed up 0.52%.
Our 10c Worth
One Thing, From Paul
Morgan Housel is a personal finance writer that you should follow. He is a partner at the Collaborative Fund and the author of a book called "The Psychology of Money". He writes very clever columns every few weeks, and you can read them here.
One of his recent insights was that getting wealthy and staying wealthy are different things. Making money requires taking risks, being optimistic, and putting yourself out there. But keeping money requires the opposite of taking risk. It requires humility, and the awareness that poor decisions can mean that your saved capital will be lost just as fast.
He writes: "there are a million ways to get wealthy, and plenty of books on how to do so. But there's only one way to stay wealthy: some combination of frugality and paranoia".
Anyway, we can help with the second problem. Once you've made it, open an account and send your savings to Vestact. We will preserve and grow your money for you in US Dollars, in New York.
Byron's Beats
We mentioned briefly yesterday that Microsoft was raising prices, and here are the details. Microsoft will charge more for Office 365 for the first time in 10 years. That news sent their shares to new highs, comfortably above $300. The stock is now up 39% for the year.
I was really surprised to hear that this was the first price increase since 2011. The Microsoft Office suite is so important for so many businesses. Just think of all the billions of dollars budgeted, captured and then tracked on Microsoft Excel.
The price hikes are rather small, but Microsoft's revenue will be swelled across hundreds of millions of accounts. The top-end premium Office 365 goes from $35 a month to $38. The Business Basic package goes from $5 to $6. The increases also come with extra features, some bundles will now include Teams and Whiteboard.
We often talk about Netflix and their ability to raise prices at will. Microsoft has that power too. I highly doubt that many of their 300 million paid Office clients will leave because of these marginal increases. What a fantastic business!
Michael's Musings
Stats SA released our quarterly unemployment numbers yesterday, and they were depressing. Unemployment in South Africa reached 34.4%, the highest on record and the worst among 82 countries tracked by Bloomberg. If we look at the expanded definition, which includes discouraged work-seekers, the rate shoots up to 44%.
Some people think that the rate of joblessness can't be as high as the official numbers, arguing that the informal sector must be much larger than their estimates. Their contention is that South Africa would surely see more mass uprisings if one in two people were really unemployed.
According to Stats SA, the formal sector shed 375 000 jobs over the last quarter, but the informal sector managed to absorb 184 000. In an ideal world, the informal sector would be smaller.
Looking at the provinces, the lowest unemployment rate is in the Western Cape with 26%, the Eastern Cape is the worst with 47%. Graduates have an unemployment rate of 11% and those with just a matric are at 37%, worse than the national average.
Our country desperately needs growth. It will solve a whole host of issues. Maybe we need a different government, with some fresh ideas?
Bright's Banter
Lagos, Nigeria-based OPay has gone from zero to a hundred after the company raised $400 million in a round led by SoftBank and Sequoia China, at a valuation of $2 billion. OPay is a fintech startup that started as a ride-hailing business and then pivoted to digital payments and banking when the Lagos government banned motorcycles in the city.
OPay was founded in 2018 by the high-flying Chinese billionaire entrepreneur Zhou Yahui. He wants OPay to help emerging markets grow faster. OPay provides individuals with point-of-sale machines that can also function as banks and ATMs.
Today, the company processes $3 billion transactions every month for its 160 million active users, thanks to a network of over 300 000 agents across Nigeria. The agents can open accounts, receive deposits and facilitate withdrawals. What an interesting story from a company I hadn't heard about until yesterday.
Linkfest, Lap It Up
A rare manual for an Apple II Computer from 1980 was just sold at auction for nearly $800 000. This one was actually signed by Apple co-founder Steve Jobs and angel investor Mike Markkula - Apple II Manual with Steve Jobs signature.
Africa is home to most of the world's fastest growing cities. Rapid urbanisation should create opportunities to sustained economic growth in these countries - The World's Fastest Growing Cities.
Signing Off
Asian markets started strongly but have cooled off a bit in afternoon trade. Japan, South Korea and Hong Kong markets are down marginally, while mainland China is basically unchanged. The recovery rally in tech stocks has faded, for the moment.
In other news, China has fully reopened the world's third-busiest port after a two-week shutdown that slowed down global exports.
US equity futures are flat in early trade. Our beloved Rand now trades at R15.05 against the US Dollar. Have a productive day!
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