vestact posted: " Market Scorecard US markets closed in the red for the second time this week, dragged down by news that the first known case of the Omicron variant was identified in the US. All three major US indexes finished lower, reversing their strong start to"
US markets closed in the red for the second time this week, dragged down by news that the first known case of the Omicron variant was identified in the US. All three major US indexes finished lower, reversing their strong start to the trading day.
The emergence of the Omicron variant is feeding uncertainty into the markets. There is not enough data out yet to make any informed forecasts. Will we see renewed lockdowns or will this strain be very mild?
In company news, the fintech giant Square is said to be changing its name to Block. This is to emphasise its focus on the blockchain. Elsewhere, Nike's Jordan brand is doing another collaboration with Fortnite to celebrate the return of the Air Jordan XI "Cool Grey". I'm sure gamers are thrilled.
At closing bell, the JSE All-share was up 1.03%, the S&P 500 was down 1.18%, and the Nasdaq dipped 1.83%.
Our 10c Worth
Byron's Beats
Walt Disney plans on spending $33 billion on content in 2022. This is $8 billion higher than the $25 billion spent in 2021. I remember when people baulked at Netflix when they first announced content spend above $10 billion in 2018.
The big number confirms Disney's huge push into direct-to-consumer content through their various streaming services. The money will go towards an estimated 50 new titles, across films and series. Remember, alongside Walt Disney, they also own Twentieth Century Studios, Marvel, Lucasfilm, Pixar and ESPN.
So far this year, the Disney share price is down 18%. People often forget how big their parks division is, and that they own a cruise-liner business; both have struggled with Covid restrictions. The uncertainty around a normal existence still has a big impact on the business.
Regardless of who wins the streaming wars, the consumer will be the real winner here. I cannot wait for Disney+ to be available in South Africa. My kids will enjoy it too, if they can get the remote.
Michael's Musings
Amazon is about to add another trophy to their cabinet - the largest US package delivery company. The company estimates that they will deliver more packages in the US by the end of the year than any other company. Amazon currently has over 40 000 trucks, 30 000 vans, 70 planes, and an airport or two in their arsenal.
This title is even more impressive because Amazon has grown their network in less than a decade, compared to a business like FedEx, founded in 1971.
Logistics is a capital-intensive and difficult business. It is why many companies outsource this function. In e-commerce, margins are already razor-thin, so controlling your distribution network helps to buffer profits. There is also the control aspect, Amazon can ensure that their customers get their parcels on time, particularly around the very busy Christmas period.
Well done Amazon. I'm glad to be a shareholder and not a competitor.
Bright's Banter
Singapore's most valuable startup, Grab, will debut in US markets on Thursday, after its deal with Altimeter was approved by shareholders. This completes the world's largest SPAC deal, valuing the super app at $40 billion. The company previously said it was looking to raise $4.5 billion in this listing to help boost its balance sheet.
The business has evolved from being a ride-hailing app to a super app that offers food delivery, e-wallet, financial services, and other consumer services in South East Asia. Grab is basically like Tencent's WeChat, without the social media aspect. This is a good thing these days, considering how much regulation social media faces.
I'm actually glad to see this deal go through given the amount of regulatory scrutiny SPACs are facing lately. This will be a great company to follow and watch how it performs against Uber. However, I wouldn't invest in it just yet, I still prefer Coupang, the 'Amazon of South Korea' in that region.
Linkfest, Lap It Up
California startup, Formcamper, has unveiled its prototype which converts the Tesla Cybertruck into a camper van. The modular design comes with an indoor and outdoor kitchen, sleeping compartments, a shower, a cool/hot air fan and a water tank - Turn your Tesla Cybertruck into a micro-home.
With a rapidly weakening Turkish Lira, some multinationals paused sales in Turkey to update their prices. Yesterday, President Erdogan reiterated his support of lower interest rates in the face of high inflation, pushing the Lira down further - Apple halts sales in Turkey as the Lira crashes.
Signing Off
Asian markets are down this morning, except South Korea which is on a tear. Hong Kong and mainland China tech shares retreated amid Beijing's plan to stop the variable interest structure loophole used by China-based companies to list on offshore markets.
US futures are up sharply in early trade, hopefully, today they actually keep these gains. The Rand has slipped to $/R 16.02. It's almost Friday!
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