vestact posted: " Market Scorecard US markets closed up yesterday, thanks to an ongoing recovery in technology stocks. Companies like Alphabet, Microsoft, Meta and Nvidia are rebounding sharply, as expected. All major indexes are up so far this week, let's see what"
US markets closed up yesterday, thanks to an ongoing recovery in technology stocks. Companies like Alphabet, Microsoft, Meta and Nvidia are rebounding sharply, as expected. All major indexes are up so far this week, let's see what the next two trading days hold.
Today, all eyes will be on the latest release of US inflation data which will shape views on how aggressive the Fed will need to be in this tightening cycle. Economists expect prices to have risen by an annualised 7%, which is a lot. Over time inflation will most probably normalise, due to base effects, the absence of stimulus cheques and the opening up of supply chains.
In company news, Uber gained overnight on robust earnings. The ride-hailing company beat on revenues and said that its main business is starting to recover nicely as humans move around more freely. Elsewhere, Disney reported good numbers and its shares rose nicely after-hours. The "house of mouse" noted that its parks and resorts business is roaring back.
In conclusion, the JSE All-share closed up 0.79%, the S&P 500 rose 1.45%, and the Nasdaq marched 2.08% higher.
Our 10c Worth
Michael's Musings
Earlier this week, Amgen released slightly boring full-year numbers. I suppose that's what you want from a drug company? In 2021 there wasn't much revenue growth due to competition pushing down the price of some of their key drugs. They aren't expecting much change for 2022 either, and the management team is guiding for a slight drop in revenue.
Even though they didn't have earth-shattering numbers, the stock still popped higher by 7%. This nice reprieve was due to a much-improved forecast announced by the management team. They revealed a plan to buy back shares to the value of $6 billion, in the current quarter alone. That's around 4% of the shares in issue; pretty heavy lifting for a three-month period.
Amgen now plans to grow revenues materially out to 2030, based on strong sales of drugs just emerging from their development pipeline, particularly in their biosimilar division. They also hope to return 60% of the net income to shareholders through dividends and share buybacks. That sounds pretty good, but a lot can happen in eight years, so we will take it one year at a time.
One Thing, From Paul
An article appeared in yesterday's Business Day, on the front page, with the following headline: "Ramaphosa may use basic income grant (BIG) to shore up his support". You can read it here. It has me worried.
I'll roughly quote from the piece, which was written by journalist Luyolo Mkentane, but is based on a proposal by former National Treasury official Michael Sachs.
"A basic income grant would involve a new expenditure commitment of between R50 billion and R100 billion, equivalent to 1% of GDP and worsen SA's fiscal position, which is already so chronic that it has itself become a central cause of slow growth and economic stagnation."
"With no clear path to closing a budget deficit that has been stuck at about 6%, the risk is that these dangers will persist, which could bring financial and macroeconomic turbulence."
"The grant may even be seen as necessary for Ramaphosa to win a second term as ANC president in 2022 and victory for the ANC in 2024."
"Basic income support is not a question of the government "being generous" and its implementation will require sacrifices, not all of which will be popular, such as tax increases."
I don't like the sound of this. Why should re-electing the ANC be a top priority for taxpayers? Surely cutting corruption and accelerating economic growth is the solution to our problems, not more spending.
Tough times ahead. My advice: continue to externalise the lion's share of your savings, from Rands into US Dollars. Contact us to add to your Vestact portfolio in New York.
Byron's Beats
We have already covered Amazon's impressive results, but I wanted to discuss their advertising business in more detail. This was the first time that Amazon broke out advertising revenues as a line item. As it turns out, the business is bigger than YouTube.
Amazon Advertising made revenues of $31 billion last year, up 30% from 2020. YouTube made $28.8 billion in the year. According to Statista the entire global newspaper industry had ad revenues of $29.5 billion in 2021.
Is there a better place to serve ads than on the world's biggest online shop? People are in buying mode and Amazon knows exactly what they are looking for. What a fantastic business.
Bright's Banter
Roblox announced that its developers and creators earned over $500 million on their platform last year. That's a 52% year-on-year increase on the $329 million amassed in 2020. Over the past three years, Roblox's developer exchange fees have ranged between 22% and 36% of the company's total revenues.
These exchange fees reflect what Roblox paid out to developers and creators in Robux, the currency used inside that platform. You can use Robux to buy items in the Roblox marketplace, or you can cash them out for real dollars. But there's an issue here.
The Roblox system is designed to discourage cashing out with minimum withdrawal thresholds and unfavourable exchange rates. You need a minimum of 100 000 Robux to cash out, which is an equivalent of $350, but if you had to buy those Robux from the platform it would cost you a cool $1 000.
Linkfest, Lap It Up
Ulysse Nardin has unveiled an ultra-redesign of one the most complicated astronomical watches. The 45mm black ceramic and DLC-treated titanium watch include world time, dual time, date, moon phase, days of the lunar month, tidal co-efficients, and positions of both the sun and moon in relation to the Earth - Ulysse Nardin unveils Black Moonstruck watch showing the sun's trajectory.
Asian markets are looking fine this morning, all up but not by a lot. US equity futures are little changed, so this may be one of those boring trading days, who knows? The Rand got lucky overnight and is trading at a frisky R15.20 to the US Dollar.
It's business as usual today, good luck out there.
WordPress.com
No comments:
Post a Comment