vestact posted: " Market Scorecard Yesterday, US markets continued to rise on the back of bumper earnings, helping indexes notch their best three-day rally since 2020. The S&P 500 has surged by 5.01% in the last three sessions, its largest gain since November 2"
Yesterday, US markets continued to rise on the back of bumper earnings, helping indexes notch their best three-day rally since 2020. The S&P 500 has surged by 5.01% in the last three sessions, its largest gain since November 2020, while the tech-heavy Nasdaq rebounded by 7.29% in the same period. As Paul says down below, it's not about timing the market, but about time in the market. You can't miss days like these.
In company news, Alphabet's (Google) shares are up over 9% in early trade after they beat earnings expectations and announced a 20-to-1 share split. Post split, its share price will be around $140, a more palatable number for new investors.
In short, the JSE All-share closed up 0.79%, the S&P 500 increased by 0.69%, and the Nasdaq rose by 0.75%.
Our 10c Worth
Bright's Banter
Medical technology company Stryker reported mixed fourth-quarter results last week. Not for the first time, Covid delayed many elective surgical procedures. The company reported revenues of $4.70 billion and profits of $662 million for the quarter, up 10.3% and 16.5% year-on-year, respectively.
The Omicron variant was not the only thing that dragged down elective surgery volumes. According to VP Preston Wells, the ongoing nursing staff shortage also disrupted hospital scheduling. On top of that, the group had delays completing installations of high-demand capital equipment in theatre rooms, wards and doctors' practices.
Despite these headwinds, Stryker's cutting-edge Mako robotic surgery system continued to sell well, managing to increase its installed base by 27% and taking the number of these robots in service to 1 500. The MedSurg division was also hard-hit by general supply chain shortages.
Management expects organic growth of 6% to 8% for 2022, this is a bit lower than the 9% achieved in 2021. I am amazed at how Stryker has managed to push through the pandemic, a truly resilient company. We expect less panic and more disco in the future. This is a good time to buy more Stryker shares.
One Thing, From Paul
As pointed out above, the US market has had a strong three-day run. In my experience, the biggest one-day gains come in the middle of sloppy markets like these.
Markets have a mind of their own, and momentum effects are at work. As we saw in January, selling leads to more selling. There's a lot of fast cash sloshing around in US markets, from hedge funds, large asset managers and other derivatives traders. Hedges are being set up or unwound. But when the sellers take a breather, natural buyers return and stocks snap back.
Anyway, there's no point trying to work out what will happen next. All I can tell you is if you miss out on being invested on these big up days, your long-term returns will be rotten.
This is also why when asked by clients if they should wait until the "coast is clear" or the "markets improve" before buying shares, I tell them to just dive in. You have to be in it to win it.
Byron's Beats
I'm currently watching Clarkson's Farm on Amazon Prime. Basically, Jeremy Clarkson owns a farm in the Cotswolds and decides to try and farm it himself. It is very entertaining. That's a Lamborghini tractor in the picture below; of course.
One key takeaway is the amount of red tape he faces. He has to get permission to do almost anything on his own land. His farm store was even closed down because the roof colour was not to the liking of the village locals.
Here in SA, there is much more freedom to run a business. We shouldn't take that for granted. Yes, the conditions are also tough in other ways, and we have a useless government that offers very little support, but the alternative is not always easier.
Michael's Musings
On Friday, the Winter Olympics kick off under a cloud of political tension and Covid scares. We'll be sure to have it on the TVs in the office.
In an effort to keep the athletes Covid-free, China will attempt to create a 'super closed-loop bubble'. It won't be an easy task to avoid millions of Beijing residents. On the off chance that an Olympic bus crashes on the way to a venue, residents have been instructed not to help, for risk of infection.
At the other end of the Covid spectrum, I'm glad to see South Africa opening up. Our economy needs all the help it can get. From a long-term perspective, we need stability in the education system. School children must be in a classroom every day because access to reliable internet is a hurdle to learning from home for many.
Next on the list will be to remove the state of disaster that is still in place, and to dump the hand sanitiser at the entrance to every shop. Let's make wearing masks optional too? The reality is that many South Africans wear their masks so badly that they are ineffective. Buffs are completely useless. Lastly, to keep strain off of our medical industry and speed up the opening, everybody should get vaxxed.
Are you investing or merely speculating? According to investor turned philosopher Naval Ravikant, the deciding factor is whether you're excited or nervous when you see your investment go down in price - The difference between investing and speculation.
Fuel is a significant cost for all airlines. A new towing system at airports could help trim that bill. Airlines and airports will need to figure out how to split the installation costs - A Boeing 747 burns one ton of fuel while taxiing.
Signing Off
Japanese markets are up this morning, carrying the load for Asia during this Lunar New Year season. The Topix (a broad-market index for the Tokyo Stock Exchange) rose by more than 2%, continuing its rally this week. Oil is near a seven-year high ahead of the OPEC meeting, where there are plans to boost output.
US futures have pushed higher in early trade as corporate earnings continue to drive the market up. The Rand is trading back at about R15.25 to the US Dollar.
If you are in Johannesburg, enjoy the big blue skies and sunshine.
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