vestact posted: " Market Scorecard Markets often stage impressive rallies right after days of sloppy declines, and that's what happened last night. Major indices on Wall Street all rose over 2% after a manufacturing gauge declined more than expected. That's backwar" Vestact - Money with a dash of funny
Markets often stage impressive rallies right after days of sloppy declines, and that's what happened last night. Major indices on Wall Street all rose over 2% after a manufacturing gauge declined more than expected. That's backwards, right? A soft data reading that tamps down fears of a more aggressive Fed in the short-term. Ok, well fine, we hope that the rest of the quarter goes just as well.
In company news, Marathon Oil was the best performer in the S&P 500, closing up 11% after talk of drastic production cuts by the OPEC+ cartel. Elsewhere, Credit Suisse fell 10% on the open after the Swiss bank tried to assuage fears about its financial health. Their hand-wringing must have helped because they ended the day down only 1%.
At the closing bell, the JSE All-share was up 0.79%, the S&P 500 gained 2.59%, and the Nasdaq rallied 2.27%.
Our 10c Worth
One Thing, From Paul
A picture is worth a thousand words. For the rest of the week, I'm going visual. Here's the first one, a cartoon by exiled Hong Konger, illustrator Ah To. It shows the present political situation in the Far East. As you can see, China is not in a great position, and the Russians are a major problem. The Japanese are getting annoyed and the US is throwing its weight around.
Byron's Beats
On Friday last week Tesla had their AI day which excited geeks all around the world, myself included. Most of the hype was focused on the Optimus robot which was just an idea six months ago and is now an actual humanoid machine that walked onto the stage. If you are into this kind of thing, Tesla Daily has done an edited video of the three-hour event, which compresses all the highlights into 23 minutes.
The clip answered my most pressing question - why would Tesla make robots? It turns out there are many similarities to making cars. The materials are the same, the robot runs off a battery and it uses the same guidance system as a self-driving car. I suspect the robots will first be used in Tesla factories before they go mainstream.
The clip also provides an update on Tesla's self-driving systems, which are making good progress. You can be sure that this company is not standing still, not for a second.
Michael's Musings
Yesterday, I noted that SARB Governor Lesetja Kganyago plans to change their 3-6% inflation target. I argued that our broad target is probably out of date, and that to bring clarity, Kganyago has unofficially made the new target 4.5%.
One of the reasons that the Rand has steadily weakened over the last two decades against the USD, EUR and other currencies is that our rate of inflation has been significantly higher than theirs. There are other factors at play, of course, but higher inflation automatically leads to a weaker currency over time, regardless of what else is happening.
Kganyago proposes setting 3% as our official target, which should help maintain the value of the Rand. He also argues that a lower target will lead to lower interest rates in the long run. In the short term, there might be some pain as we bring inflation down.
If international investors know that the Rand's value will be stable, it makes South African debt more attractive, which in turn makes it cheaper for our government to raise money.
Monetary policy doesn't operate in isolation though. The Rand and local asset prices will continue to be negatively affected by inept political leadership. Own goals like 15 years of loadshedding are terrible for investor confidence. Corruption in state-owned enterprises is also disheartening. News that the Post Office has been deducting medical aid premiums from their workers, but not paying it across to the medical aid provider are disgraceful.
Liquid Death is a company that sells water in cans. Its mission is to convince customers that their water 'hits different'. They just raised $70 million at a $700 million valuation, in a round led by Science Ventures, with participation from other investors including Live Nation Entertainment, music group Swedish House Mafia, and comedian Whitney Cummings.
The canned-water company was founded in 2019 in Santa Monica, California by Mike Cessario and came up with the tagline "murder your thirst". This water is sourced from the Austrian Alps, and canned by the beverage company Starzinger in Frankenmarkt.
The drink is distributed to stores, online, and to concerts where it is sold in 500 ml "tallboy" cans for $7. They are on pace to hit $130 million in revenues this year, up from just $45 million in 2021. Liquid Death now also sells flavoured beverages and will use the cash to expand into new categories and into the European market.
Who are the world's most generous donors? According to Forbes, George Soros is top of the list at $18.1 billion given away so far - The Forbes Philanthropy Score 2022.
Signing Off
Asian markets are up this morning with the Asia Pacific equity benchmark up more than 1.6%. The market in Shanghai is now closed for the Golden Week holidays, while the Hong Kong exchange is also off today for the Chung Yeung Festival (known in English as the Double Ninth Festival).
Surprisingly, the Nikkei 225 in Tokyo was up nearly 3% today, as investors shrugged off news that North Korea fired a ballistic missile over northern Japan for the first time since 2017.
US equity futures extended their gains in early trade, but let's see if they hold that trend until Wall Street opens much later. The Rand is trading at R17.89 to the US Dollar.
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