vestact posted: " Market Scorecard After a solid start to the week, US markets closed down a bit yesterday. Today we will receive the usual monthly US payroll numbers, which reveal trends in hiring, jobs openings and wage increases. More broadly, the third quarter " Vestact - Money with a dash of funny
After a solid start to the week, US markets closed down a bit yesterday. Today we will receive the usual monthly US payroll numbers, which reveal trends in hiring, jobs openings and wage increases. More broadly, the third quarter earnings season kicks off next week, with financial giants like JPMorgan up first.
In company news, chip maker AMD slid in late trade after publishing worse-than-expected preliminary results. The top performer on the S&P 500 last night was Dexcom, a San Diego-based maker of glucose monitoring machines. It rose 4.5%.
In summary, the JSE All-share was up 0.34%, the S&P 500 fell 1.02%, and the Nasdaq softened by 0.68%.
Our 10c Worth
One Thing, From Paul
This week's personal advice is from James Clear who wrote the book called Atomic Habits. His general idea is to make small changes that turn into good habits, which end up defining who you are.
Clear reminds us that "whatever age you are today, your future self would love to be it. Most people do not consider 65 to be a young age, but when you're 75, you'd love to rewind to 65 and regain those years. Few people would describe 35 as your youth, but in your mid-50s your mid-30s will seem like the "young you."
In other words, don't delay, just get stuck in and fix things now. Clear again: "Today is a great opportunity, no matter your age. The moment in front of you right now is a good one. Make the most of it."
Byron's Beats
Bear markets are good for new investors and regular savers. Take a look at this table from Charlie Bilello which shows the return of the S&P 500 after periods of extreme fear and extreme greed, going back to 1987. According to a sentiment survey, the bears outnumbered the bulls by 43% during those periods of extreme fear.
Right now market participants are the most bearish they've been since October 1990 and March 2009. Historically, the returns post peak bearish sentiment are fantastic.
It is so much easier to be fearful when markets are tough, even though history tells you that you are most likely wrong. It can certainly get worse from here but the risk/reward for applying funds into the market today are in your favour.
Michael's Musings
The liquidity of investments in the stock exchange is both a good and a bad thing. It's great to be able to get your money back, regardless of how much, in just a few days. The market moves around a lot, so we are always getting live updates of our portfolio values. Unfortunately, if you get caught up in the heat of the moment and start panicking, you'll be tempted to sell, locking in your losses with a few clicks of your mouse.
By contrast, I'm not quite sure what has happened to the value of the house that I bought at the end of last year. I still receive notifications about new property listings on the local websites, and updates whenever a listing price is reduced. I'd guess that house prices in my area have dropped 10 to 15% over the last year.
Property transactions are notoriously slow and costly. You can't sell a home on a whim and get your money back promptly, as you can with equities. Mind you, I plan to live in my new house for at least ten years, so it's resale price today doesn't actually matter.
I should turn off those property notifications. In the same vein, if your weekly Vestact portfolio mini-statements are getting you down, let us know and we can turn them off for a while.
Bright's Banter
Japanese bank Mizuho Financial Group is buying a 20% stake in Rakuten's online brokerage arm for $552 million. This deal came just in time as Hiroshi Mikitani was planning to list Rakuten's securities and banking businesses separately.
This is a good deal for Mizuho as the bank wants to expand into technology and digital services. Conversely, the alliance will help unlock value for Rakuten which needs cash to fund its capex-hungry mobile network business.
This is not the first Japanese bank to make such a deal. Earlier this year, Sumitomo Mitsui, a bank that has been struggling to build scale in its digital services took a 10% stake in SBI, the country's largest internet brokerage, to help bridge the gap.
Asian markets have gone backwards today, as traders digested disappointing earnings from Samsung that may foreshadow a broader decline in corporate profits. The overall far eastern equity gauge fell for the first time in four trading days, with tech shares getting hit the most.
The US jobs report will hit the wires at 14h30 SAST this afternoon, expectations are that employers have added another 255 000 workers in September. If it's much higher than that markets will fall, because of the usual Fed fears.
US equity futures are fluctuating in early trade. We are sorry to report that the Rand has breached the R18 level to the US Dollar again. That's just a psychological number, but it feels bad.
The weekend is here, just a few hours of work to get through and then you are free. Enjoy!
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