vestact posted: " Market Scorecard Yesterday, US markets finished the trading session mixed. The S&P 500 came off its lows but eventually closed with a modest decline, sending the broad index into a second straight month of red. Conversely, the tech-heavy Nasda"
Yesterday, US markets finished the trading session mixed. The S&P 500 came off its lows but eventually closed with a modest decline, sending the broad index into a second straight month of red. Conversely, the tech-heavy Nasdaq turned higher as turbulence continued across global markets. The S&P500 and Nasdaq have lost 8.2% and 12%, respectively, year-to-date, their worst stretch since March 2020.
In company news, defence stocks continue to rally with Northrop Grumman jumping a record 7.9% yesterday. It is now up 15% year-to-date, making it one of the best performers in the S&P 500. Other companies in the sector have also performed well during the Ukraine crisis, Lockheed Martin is up 22% so far this year, while Raytheon and General Dynamics are up 18% and 13%, respectively.
On Friday, the JSE All-share closed up 2.54%, the S&P 500 fell 0.24%, and the Nasdaq climbed 0.41%.
Our 10c Worth
One Thing, From Paul
One good thing about the stock market is that it opens every day of the work week. We get a real-time reaction, reflected in changing share prices, of the news of the day. Of late, the news has not been great, what with war breaking out in eastern Europe. Accordingly, stock prices have been sloppy.
I like to start each day afresh, review the headlines and then wait to see the market moves during trading hours. Every morning, we are refreshed and hopeful, ready for the market to open.
This reminds me of a quote I saw from the writer Ralph Waldo Emerson, who lived in Boston, Massachusetts, in the 1800s. He also believed that one should forget about yesterday and start with a good attitude each morning.
"Finish every day and be done with it. For manners and for wise living it is a vice to remember. You have done what you could; some blunders and absurdities no doubt crept in; forget them as soon as you can. Tomorrow is a new day; you shall begin it well and serenely, and with too high a spirit to be cumbered with your old nonsense. This day for all that is good and fair. It is too dear, with its hopes and invitations, to waste a moment on the rotten yesterdays."
Byron's Beats
Everything Cathie Wood touched in 2020 turned to gold. However, the rerating of growth stocks has caused her ARK funds to be absolutely crushed over the last year. It is not often you see an index of stocks fall over 60%. But I am not here to criticise Cathy Wood.
Last year the ARK fintech fund took a R650 million stake in Discovery Health. This was very pleasing to see, as I often feel that Discovery's amazing tech has not been fully appreciated globally. Of course, it is up to Discovery to spread the word and sell their intellectual property. They did recently strike a deal with AIA in Asia to do just that.
ARK bought into Discovery when it was trading at R120 a share. It is now at R160. Let's hope this is the start of a good run for the stock. We are still long Discovery in local portfolios.
Michael's Musings
Yesterday Bright noted that China is a key growth market for Tesla and other EV players. The surge in Tesla's share in 2020 was arguably kickstarted by the completion of the Shanghai Gigafactory, when the market realised how quickly Tesla would increase production. Rumours are swirling that Tesla is in the process of planning a second Chinese Gigafactory.
It makes sense to have another factory in China. From breaking land to the first car rolling off of the assembly line took less than a year. Compared to Germany, where that Gigafactory has been sitting idle for over two months while they wait for final certification. The Chinese factory was also significantly cheaper than the US counterpart, over 50% cheaper!
A second factory would take Tesla's production capability to two million vehicles a year in China. For context, Toyota produced 1.6 million cars in China last year.
Time will tell if the rumours are true.
Bright's Banter
Uber is looking for opportunities to accelerate the sale of its stake in a taxi joint-venture with Russian internet search company Yandex. The ride-hailing giant merged its operations in Russia and other neighbouring countries with Yandex in exchange for a 29% stake in a joint venture that was valued at $3.8 billion at the close in February 2018.
The company will also remove its executives from the board of the joint venture. According to Bloomberg, in August, Yandex bought out Uber's interest in several joint ventures including Yandex.Eats, Yandex.Lavka and Yandex.Delivery. This restructuring also whittled down Uber's shares in MLU, the companies' mobility-focused venture.
More western companies are going to distance themselves from anything related to Russia. According to FactSet, among the S&P 500 companies, only 1% of revenues stem from Russia and Ukraine. This means the adverse economic effects that will be felt in both Russia and Ukraine won't necessarily translate into losses in S&P 500 businesses.
Linkfest, Lap It Up
Apple's spring event is around the corner. It's rumoured to feature a 5G iPhone SE and upgraded MacBooks based on the new M2 chip. The M2's CPU is expected to be faster with better graphics than the M1, but should retain the same eight-core architecture - What to expect from Apple's mid-year event
Visual Capitalist gives a breakdown of what goes into EV battery packs. Reducing the price of the commodities used, will go a far way in bringing down battery storage costs - Breaking Down the Cost of an EV Battery Cell.
Signing Off
Asian markets are up this morning, China's manufacturing data signalled some improvement which the market seemed to receive well. The MSCI Asia-Pacific index is having another good day.
US equity futures wavered in early trade after another volatile day of trading. The Rand is trading around R15.37 to the US Dollar.
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