vestact posted: " Market Scorecard On Friday, US markets finished in the red again. The third quarter of 2022 (July to September) was not a good one, with stocks now at new lows for the year. The major indices have not had a less impressive first nine months of a c" Vestact - Money with a dash of funny
On Friday, US markets finished in the red again. The third quarter of 2022 (July to September) was not a good one, with stocks now at new lows for the year. The major indices have not had a less impressive first nine months of a calendar year since 2002. Risky assets have been in a tailspin since the Fed delivered a third jumbo hike in September.
In company news, Tesla announced that it delivered a record 343 830 cars to customers in the quarter, up from about 255 000 in the prior period. Elsewhere, Nike shares fell 13% after its latest set of results.
On Friday, the JSE All-share closed up 0.73%, but the S&P 500 tumbled 1.51%, and the Nasdaq also lost 1.51%.
Our 10c Worth
Byron's Beats
History tells us that we achieve and learn the most during times of difficulty. I would say that the world is in a pretty precarious place right now. What are the main issues that need immediate attention?
Energy is certainly one of them. There are currently fierce debates about bringing back fossil-fuel sources to fill the gap created by sanctions on Russian supply. That's a short-term debate in my opinion. What is really happening is an energy revolution. In 10 years time, I believe that most of the Western world will be energy independent and the majority of that energy will come from renewable sources.
We have also seen big supply chain issues since the Covid pandemic, because of poor inventory management. Global logistics has been turned on its head but you can bet your bottom dollar that big corporates like Nike and Apple are working very hard to find better solutions. The same applies to inventory management.
Inflation might be red hot at the moment but the lessons being learnt now will result in another purple patch of high growth, manageable prices and low interest rates within the decade.
Michael's Musings
High inflation and the subsequent increase in interest rates is a hot topic right now, and a pressing issue for people from all walks of life. Reserve Bank governor Lesetja Kganyago spoke last week about changing the SARB's inflation mandate to bring it more in line with our global peers and to set it at 3%.
At the moment, Kganyago's job is to keep inflation between 3% and 6%. By comparison, the EU, UK and US have inflation targets of 2%. Brazil aims for 3%. You will notice that our goal is broader and higher than many of our international peers. Both characteristics are a problem.
The broad target was implemented to give policymakers some wriggle room while our economy went through post-1994 transformation. In its current state, it only causes confusion about when the SARB should act. In the past Kganyago has stated that the SARB will be targeting the middle of the range, so our real target is 4.5%. That's too high.
Bright's Banter
French luxury brand Cartier is planning to expand its American retail footprint. As you know, Cartier belongs to Richemont. The upscale jewellery and watch-making company announced plans to open another 10 US stores in the coming years. They currently have 30 US stores. This is a sign that European high-end labels are betting that American demand will remain robust post-Covid.
The move is part of Cartier's overall strategy to grow its 270-store global footprint by 10 per cent in the next five years. They are eschewing coastal metro areas like New York and Los Angeles, instead exploring potential outposts in Seattle, Austin and Troy. They may add second or third locations in cities where it already operates. "We need more square footage because the traffic is so high," said Cartier CEO Cyrille Vigneron. The recent deal between Richemont and FarFetch will help boost online sales and improve inventory management. The e-commerce platform will make it easier for Cartier and other brands in the Richemont stable to offer options such as in-store pickup for online orders.
One Thing, From Paul
Giorgio Armani and Paul Smith are both legendary designers. I don't know much about the fashion industry, but I really enjoyed this transcript of a conversation they had about business, life, family, travel, and their respective Italian and British roots.
Here is a sample:
Giorgio Armani: From my perspective, there is an essential British quirk to your vision. Whereas I see myself as quintessentially Italian in my appreciation of soft elegance - do you agree?
Paul Smith: I've been enjoying your career and your clothes since the early 1970s, and you've always had that same aesthetic, which is to do with quality, freedom of movement, and softness. And your colour palette has always stayed more or less the same, with gentle taupes, creams and putty colours. Mine, being a British designer, has what we call 'tongue in cheek' - classic with a twist and quite playful. Which in many countries is very positively received, and in other countries is not always understood.
Roger Federer's retirement marks the end of a historic chapter for tennis. It's also the end of an era for one of the most iconic brand partnerships in the sports world - Roger Federer's timeless Rolex collection.
Signing Off
Asian markets have struggled to gain traction this morning. The Nikkei 225 in Japan has made some gains but shares are weak in Hong Kong. The Korean market is closed for the Gaecheonjeol public holiday, also known as the National Foundation Day. They are celebrating the formation of the first Korean state of Gojoseon in 2333 BC. That's a while ago!
Oil prices have risen a bit this morning on news that OPEC+ is considering slashing production by more than 1 million barrels a day to revive plunging prices when the alliance meets this week. Oil is one of the villains in the inflation conversation, so we like it when prices are low.
US equity futures are slightly higher in early trade. The Rand is trading at around R18.00 to the greenback.
This is the final quarter of 2022, let's get it on.
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