Market Scorecard
On Friday, US markets had a late-day slide to close in the red after producer-price data came in hotter than expected. All three major US indices ended the week with losses, breaking a two-week winning streak. The S&P 500 retreated 3.4%, while the Dow notched its worst weekly drop since September.
Recession fears have resurfaced ahead of the US CPI data out tomorrow and the Fed interest rate decision on Wednesday. Policymakers are expected to decelerate to a 50 basis point hike, meaning borrowing costs will remain restrictive for some time.
In company news, the Competition Tribunal has approved the sale of Massmart's Cambridge grocery business to Shoprite. Shoprite is set to pay around R1.36 billion for Cambridge Food, Rhino and Massfresh stores. Elsewhere, a Japanese lunar lander carrying two rovers and other payload lifted off via SpaceX Falcon 9 rocket yesterday, this could be the first commercial spacecraft to land on the moon.
On Friday, the JSE All-share closed up 0.11%, the S&P 500 was 0.73% lower, and the Nasdaq fell 0.70%.
Our 10c Worth
One Thing, From Paul
I love it when young, creative people use the latest software or online platforms to do something fresh. Like this guy, Jimmy Donaldson, better known by his online persona, MrBeast.
He's only 24 years old, for goodness sake, and he's already the most-followed person on YouTube with 117 million subscribers. He creates viral content like re-building Willy Wonka's Chocolate Factory, a remake of Squid Games, or squashing a Lamborghini in a hydraulic press. He, and YouTube parent company Google, make money from the ads served alongside that content.
Now he is turning his massive following into a consumer business. He doesn't need to do marketing because he already has everyone's attention. Last year he created a delivery-only burger chain called MrBeast Burger. In January 2022 he launched a line of snacks called Feastables. Both are flourishing.
He's currently raising $150 million to fund new projects, valuing his empire at $1.5 billion. Good luck to this guy, he seems really talented.
Byron's Beats
I share this every year. Having read the most recent one, it is worth sharing again. Tom Whitwell's 52 things I learnt in 2022 is full of facts that will make you far more interesting at this year's Christmas lunch. Some of my favourites include.
- Fees from music playing on Peloton are a top 10 account for pretty much all major record labels right now.
- Data centres will consume 29% of Ireland's electricity by 2028.
- 37 percent of the world's population, 2.9 billion people, have never used the Internet.
- A man's partner's competitiveness increases their future income. Their own competitiveness makes little difference.
- Egg yolk colour preferences are regional: Northern Europeans like paler yolks, Mediterraneans a deeper orange. In South Africa, white corn makes egg yolks super pale.
- Fondue was popularised by the Swiss cheese cartel.
Bright's Banter
Amgen has been one of our top-performing stocks this year. The drug company has strong cash flow and scored a win with early trials showing positive data for their anti-obesity drug. Amgen are now in advanced talks to buy drug company Horizon Therapeutics in a deal likely to be valued well over $20 billion, marking the largest healthcare merger of the year. The Vestact-recommended company is the last of three suitors standing in an auction for Horizon after Sanofi and J&J capitulated.
Horizon develops medicines to treat rare autoimmune and severe inflammatory diseases, which are sold mostly in the US. Their biggest-selling drug, Tepezza, treats thyroid eye disease, an affliction characterised by progressive inflammation and damage to tissues around the eyes.
Horizon received regulatory approval for Tepezza in January 2020. Last year, revenue from Tepezza more than doubled, driving Horizon's overall sales 47% higher to $3.23 billion. Horizon expects Tepezza's global sales to peak at more than $4 billion as the company seeks approval to sell its drugs in Europe and Asia starting with Japan.
In October, Amgen completed a $3.7 billion deal for ChemoCentryx and its drugs that treat inflammatory and autoimmune diseases as well as cancer. Adding Horizon to the lineup will strengthen their rare immune-disease catalog which currently also includes Enbrel and Otelza immune-disease therapies.
Linkfest, Lap It Up
Did you know that one of the stadiums used in the Football World Cup is temporary? A 40 000 seater stadium was constructed out of 974 shipping containers and hosted seven matches - Workers begin dismantling Qatar's temporary Stadium 974 before it is rebuilt in Uruguay for World Cup 2030.
Why you should almost always wash your clothes on cold. While you're at it, don't wash them so much - A textile and apparel sustainability professor shares tips on how to save energy on washing clothes.
Signing Off
Asian markets are down this morning, ending a two-day winning streak. Benchmarks in Hong Kong, Japan, mainland China and South Korea fell as the rapid spread of Covid cases in China added to concerns.
There are central bank interest rate decisions due this week from the Fed, ECB, BOE and the SARB locally.
US equity futures are slightly in the green. The Rand is trading at around R17.39 to the US Dollar.
Sent to you by Team Vestact.
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