vestact posted: " Market Scorecard US markets fell again yesterday as sentiment grows that the Fed might have to respond more aggressively to rising inflation. All eleven sectors of the S&P500 ended in the red, and the tech-heavy Nasdaq is off to its worst thre"
US markets fell again yesterday as sentiment grows that the Fed might have to respond more aggressively to rising inflation. All eleven sectors of the S&P500 ended in the red, and the tech-heavy Nasdaq is off to its worst three-day start to a new year since 2008.
The catalyst for yesterday's drop was the release of the Fed's December minutes, indicating that they might lift interest rates as soon as March, not May as previously thought. This sent bond yields to their highest levels since early April 2021 and growth stocks into a tailspin.
In company news, Beyond Meat announced that its plant-based alternative to fried chicken would be sold at KFC starting next week. Elsewhere, BTCS saw its share price surge over 43% yesterday after announcing that it will pay its dividend in Bitcoin.
At market close, the JSE All-share was up 0.01%, the S&P 500 dropped 1.94%, and the Nasdaq sank 3.34%.
Our 10c Worth
Byron's Beats
While we were sitting on the beach over the holidays, Stryker announced a very exciting collaboration with Microbot Medical. Stryker will integrate its neuromuscular instruments with Microbots robotic system to develop the world's first robotic kits for neuromuscular procedures.
Robotic surgery is very useful because it allows surgeons to operate remotely. Not only does that allow surgeons to perform vascular procedures from anywhere around the world, but it also reduces radiation exposure and is less physically stressful.
Intuitive Surgical is the global leader in robotic surgeries with its da Vinci surgical systems. It is good to see Stryker hopping on board, I get the feeling the trend in this field will only grow.
Michael's Musings
The numbers surrounding the biggest tech firms are a bit mind-numbing. It is hard to imagine a company reaching a value of $1 trillion, let alone $3 trillion. What is equally difficult to imagine is the cash piles of each company. Many of these companies sit on over $100 billion in cash. For reference, South Africa's GDP is around $300 - $350 billion, depending on our exchange rate.
This is actual cash, which can be spent tomorrow, unlike Elon Musk who has most of his wealth in company stock.
I saw the tweet below during the break showing the forecast revenue of the big tech companies. As expected, there is still huge growth predicted for them. The internet has allowed these companies to grow quickly and with huge profit margins. We might only be a few years away from a company having $1 trillion in sales!
Happy 2022.
Bright's Banter
Smartphones have been around as early as 1996 when Nokia released the Nokia 900 Communicator. But they didn't take off until Steve Jobs released the ground-breaking buttonless touch screen iPhone in 2007. This also changed the fortunes of Apple in a big way because the iPhone contributes to about half of revenues for the company and about two-thirds of profits.
In the earlier days of the smartphone, innovation was central to everything; from having faster phones, bigger storage, quality screens, and epic camera quality. Today, smartphones are a status symbol, up there with fancy Pateks and Chanel handbags.
Smartphone penetration peaked in 2016 when Apple, Samsung, and others shipped over 1 473 million devices. For comparison purposes, smartphone shipments dropped to 1 292 million units in 2020, the lowest since 2013. I am in the camp that we should see this number pick up again with more innovation, which will translate to more profits for Apple!
Here is some big merger and acquisition news to start the year. South Africa's largest data centre operator, Teraco Data Environments, has been acquired for R55 billion - Teraco now worth twice as much as Telkom.
Visual Capitalist regularly have interesting infographics. Here is a recap of some from last year - Our Top 21 Visualizations of 2021.
Signing Off
Asian markets are all down this morning, meaning the MSCI Asia-Pacific is red for the third day out of four. Hong Kong reimposed stricter Covid rules and halted flights from eight countries. China put in new restrictions for people travelling from the US, and Tokyo raised alert levels after Covid cases surged.
US futures are down in early trade, so we could see another dip today. The Rand is trading at around R15.96 to the US Dollar.
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