vestact posted: " Market Scorecard Yesterday, US markets ended mixed after all three indices spent much of the first half of the day firmly higher. The S&P 500 gave back those gains in the afternoon and is now down for six days in a row, its longest losing stre" Vestact - Money with a dash of funny
Yesterday, US markets ended mixed after all three indices spent much of the first half of the day firmly higher. The S&P 500 gave back those gains in the afternoon and is now down for six days in a row, its longest losing streak since February 2020. However, the tech-heavy Nasdaq bucked the trend and closed up. Green is still our favourite colour.
On the economic front, data showed that US companies reduced durable goods orders for a second straight month. Elsewhere, home prices continued to notch big year-on-year gains, but the pace of that growth has slowed. Home prices dropped month-over-month, which should help with the core-inflation number.
In company news, Apple shares rose on reports that the new iPhone 14 Pro models were selling well. Elsewhere, Eisai and Biogen said their Alzheimer's drug called Lecanemab significantly slowed the disease. Although the outcome was not all that conclusive, this is the first medicine to blunt the progression of Alzheimer's in a large-scale trial.
At the end of the day, the JSE All-share was up 0.63%, the S&P 500 lost 0.21%, and the Nasdaq gained 0.25%.
Our 10c Worth
One Thing, From Paul
We own Discovery for clients with Rands invested here on the JSE. There are 208 holders with shares worth R40.3 million and I'm one of them. Despite being one of South Africa's most innovative companies, Discovery's share price has languished in recent years. They trade at R105 today and you could have bought them at about the same price in November 2014.
The business is much more complicated now. Back then, Discovery was mostly a medical aid scheme administrator, with some side start-ups. Now they are that plus a market-leading life insurer, a bank, an asset manager, a short-term insurer, and a global technology solution provider in the wellness business.
Tim Cohen had a brilliant write-up about Discovery in his "After The Bell" column in the Daily Maverick recently. He concludes that the South African investment community is innately conservative and is uncomfortable with Adrian Gore's ambition, which results in patchy profitability. Give the whole thing a read here: Discovery is an investment riddle and needs some discovery.
Byron's Beats
According to Hugo Pienaar from the Bureau for Economic Research at Stellenbosch University, the Rand is down 13% this year to the Dollar. That is ugly. But over the same period, the Euro is down 15%, the British Pound is down 20.5% and the Japanese Yen is down 25.5%. It is not entirely Eskom's fault that we are at R18.20 to one USD. Although a failing economy does not help.
The problem with the Dollar being so strong is that it creates imported inflation for many countries. Commodities like oil are priced in Dollars, making imported goods more expensive in local currencies. An estimated 40% of all transactions are in Dollars.
US companies selling goods outside the US will make less money when reporting results in Dollars. This will be a strong theme coming through in the upcoming earnings season.
The Dollar is strong because interest rates in the US are on the rise. If you are getting a 4% yield on US treasuries it makes sense to buy Dollars and then buy those bonds. That is what is happening. Vestact clients are long dollars which is a good thing at the moment but we do want this to unravel a bit for the sake of global inflation and equity performance.
Michael's Musings
Most of my friends have their jobs because of someone in their network. In one case, a friend was taking out his wheelie bin for the rubbish collectors, got chatting to his neighbour and ended up landing a job interview.
Employees are crucial for success, and firing a dud staff member is tough, so it makes sense that companies hire known people, even if there is only a very weak connection.
A recently published study confirmed that the best way to find a job is through a weak connection in your network. The study used data from LinkedIn to see which people in our network provide the most job opportunities. According to the data, it was people in your network with whom you don't have more than 10 friends in common.
The researchers speculate that a weak connection is better than a strong one because strong connections move in the same circles and are exposed to similar opportunities. A weak connection moves in different circles, meaning they bring opportunities to your attention which you wouldn't usually see.
The conclusion is that you should cultivate a wider, more diverse group of people in your network.
To make it onto the Forbes 400 list, you have to have at least a net worth of $2.7 billion. The number is down from $2.9 billion last year, but still very steep from just a decade ago, when the cutoff for this elite bunch was 'just' $1.1 billion.
That leaves a ton of famous faces behind. Oprah Winfrey, with an estimated net worth of $2.5 billion, is too poor to make the list. My role model Kanye 'Ye' West with $2 billion doesn't make it either. Neither does Kim Kardashian ($1.8 billion), the GOAT Michael Jordan ($1.7 billion), Peter Jackson ($1.5 billion) or Jay-Z ($1.3 billion).
The same goes for my favourite investor, philosopher and Warren Buffett's longtime business partner, the 98-year-old Charlie Munger ($2.1 billion); JP Morgan CEO Jamie Dimon ($1.4 billion); and Tim Cook ($1.8 billion) Apple's top boss since 2011.
In all, Forbes found more than 300 billionaires who didn't have enough dough to crack the Forbes 400.
Equities are looking poor in Asia, extending declines to hit the lowest levels in almost two years. The Kospi, Topix and Shanghai Composite all dropped, while the Hang Seng is trading at a decade low. The onshore Yuan fell to the weakest level against the greenback since the global financial crisis of 2008. Urgh.
US equity futures are pointing towards a negative open, but it's early days. The Rand has taken a tumble overnight and is trading at R18.20 to the US Dollar. Officials from the White House talked down the prospect of a currency agreement to weaken the greenback.
It's a peaceful spring morning in Johannesburg. Good luck to the residents of Florida in the US. Hurricane Ian is expected to make landfall in the state by tomorrow morning.
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