vestact posted: " Market Scorecard Yesterday, US stocks fell for a third straight session, bringing the S&P 500's decline to 5.1% in that period. That's ugly. The pullback was broad, with all eleven sectors of the S&P 500 finishing in negative territory. " Vestact - Money with a dash of funny
Yesterday, US stocks fell for a third straight session, bringing the S&P 500's decline to 5.1% in that period. That's ugly. The pullback was broad, with all eleven sectors of the S&P 500 finishing in negative territory.
Robust US labour demand and consumer confidence data out yesterday probably added to the case for the Fed to stick to its hawkish stance in the interim. There's only one trading session left in August, and all three indices are on track for declines of at least 3% for the month.
In company news, Best Buy and Big Lots shares rose 1.6% and 12%, respectively, after the retailers both reported quarterly results that beat the street's expectations. However, they warned of slowing spending as consumers are kneecapped by high inflation.
In summary, the JSE All-share was down 1.89%, the S&P 500 slid 1.10%, and the Nasdaq slumped by 1.12%.
Our 10c Worth
One Thing, From Paul
According to an old article that I stumbled upon in the UK Guardian, about one-third of people in the UK collect something.
I'm sure we all know someone who collects handbags, watches, wine, coins, stamps, vintage clothes, or fancy crockery. It gets weirder, of course. What about people who gather bits of old wood, non-running antique cars, exotic orchids, British royal family memorabilia, or Manchester United team shirts from the 1970s?
Why do we do this? According to Christian Jarrett in The Rough Guide to Psychology, "unloved children learn to seek comfort in accumulating belongings". Another explanation is that "collecting is motivated by existential anxieties because the collection, an extension of our identity, lives on, even though we do not". Finally, "evolutionary theorists suggested that a collection was a way for a man to attract potential mates by signalling his ability to accumulate resources".
Haha, those are not very flattering explanations. It's fine to collect items for the satisfaction of seeking and owning them. It can also be fun to interact with other collectors. Just don't think of it as an investment. Collectibles are usually easy to buy, but much harder to sell. So don't get carried away.
Don't collect too many items and become a hoarder. If you move home it could be a problem. When you depart planet Earth, your beloved collection will probably end up in the nearest dumpster.
Byron's Beats
We are constantly asked by clients if the US is going into a recession and if we should still be holding stocks listed there. The media cannot stop talking about the "imminent" recession so naturally, it would be concerning if you have investments in America.
Our job is not to try to predict recessions. We are long-term holders of stocks, so we do not plan to sell them when times get tough. Our job is to pick stocks that can survive recessions. At the moment, a shallow recession seems likely, based on the analysis of the experts who define and decide these things.
Here is what I wrote to a client who is worried about the current state of the US economy.
"Ironically the market almost needs a recession to cool down inflation. That is how these cycles work. Once inflation cools down the Fed can put less pressure on the stock market via interest rates.
The market already knows all of this and has factored in the possibility of a recession. You should stay in the market because it is forward-looking and will recover way before the economy.
The rest of the world is also a bit in shambles. The US is still the most business-friendly place on the planet. Democrats and Republicans pulling in opposite directions cancel each other out and let the economy do its thing.
Times are tough, but they will pass. We should stick to the plan. Jumping ship now would be a mistake."
Bright's Banter
In 2017, US pet owners spent $25 billion on their beloved animals, and that number is expected to shoot up north of $54 billion this year. That's a lot of money, but well spent in my view.
The US is the world's largest market for pet food and pet care by revenue.US pet food sales are expected to grow by 8.5% per year from now until the year 2027, and crest $80.75 billion. The largest growth market for animal feed worldwide is South America. They like their dogs in Argentina, clearly, with feed growth of 60% expected there by 2027.
How to invest in this theme? The largest company in the sector is Zoetis which was spun out of Pfizer. It's the dominant producer of medicine and vaccines for pets and livestock. Other options include e-commerce-focused Chewy which sells pet food and toys online, and Elanco which does the same thing as Zoetis and was spun out of Eli Lilly.
Freshpet plays in the animal food products that are marketed as "fresh" but like Elanco and Chewy they're just too small for our liking. A company I would really like to see spun out of Nestle is Purina, it's said to be one of the most profitable businesses in the sector thanks to its dominance in North America and Europe.
Emojis emerged on chat rooms in the 1990s. They are now intertwined with evolving language, popping up in emails and even books - Why dads love the thumbs-up emoji.
Good stuff doesn't just happen, you have to make it happen. On the other hand, over-planning takes the spontaneity out of leisure activities - The case against scheduling your fun.
Signing Off
Asian markets started badly, but have since erased most of their intraday drop. South Korean markets pushed into the green, as did Hong Kong. Bourses in Japan, and mainland China are still paddling in the pool of red.
Shares of Electric car-maker BYD sank in Hong Kong after Warren Buffett's Berkshire Hathaway trimmed its stake.
US equity futures are higher in early trade, let's see if we can hold on to these gains. The Rand is trading at R16.92 to the greenback.
It's a gloomy day in Johannesburg, but the clouds are expected to clear as the day goes on. Stay optimistic.
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