Market Scorecard
US markets closed in the green again yesterday, adding to the upbeat tone that has been on display this week. The S&P 500 climbed for the third time in four trading days and ended at its highest level in six weeks. Technology shares pushed further into bull market territory, now up a very healthy 19% for the first quarter of 2023.
In company news, Alibaba's logistics arm Cainiao Network Technology has started preparations for a Hong Kong IPO. JD.com followed suit, announcing that two of its subsidiaries would list in Hong Kong (its ADR in the US closed up 8%). Zebra Technologies was the best performer on the S&P 500, rising 4.4% after the mobile computing and barcode printing company was upgraded by a sell-side brokerage.
In summary, the JSE All-share closed up 0.29%%, the S&P 500 rose 0.57%, and the Nasdaq closed 0.73% higher. Very satisfactory, thank you.
Our 10c Worth
One Thing, From Paul
Friday is advice day, when I throw out a life suggestion. This week, it's to take a really long walk. I don't mean the kind where you take the dogs to the park. I mean the kind where you walk for a few days, carry a backpack, and stay over at different places along the way.
This suggestion came to me when reading this wonderful column in the Washington Post, written by Neil King. He's a former Wall Street Journal reporter and author of the forthcoming book called "American Ramble: A Walk of Memory and Renewal".
Here are some excerpts from his account: "I took a long walk one spring morning with the express goal of simply paying attention to what I saw and heard. I was working on a hunch - that over the past decade, our gadgets and our penchant for speed and the piling on of distractions have diminished our capacity for wonder, awe, and kindness. So I walked out my door a few blocks from the US Capitol, took a left past the gate, and lit out for New York City."
"I didn't go to notch some great physical achievement. My meandering, 330-mile saunter along the edges of roads and highways was all about paying homage to the land in between and to what it could tell me, step by step, over 26 days. As the weeks and miles ticked by, the quiet attentiveness of those days cleansed my eyes and opened my spirit. They changed me and created a space I can step into even now."
Michael's Musings
The top 4 apps in the US Apple store are all made in China. They are Temu, CapCut, TikTok and Shein. Facebook is in position 5. This shows that young consumers are becoming more dominant online. I suspect most people reading this blog haven't used any of these apps, other than TikTok.
Temu and Shein are cheap shopping apps that link consumers with factories in China, cutting out the middleman to reduce costs. CapCut and TikTok are both owned by ByteDance - the one app creates videos and the other serves them to viewers. Cheap clothes and short videos are the focus of the US at the moment.
The WSJ made an interesting observation about why these Chinese companies have so much success: "They leverage China's one billion internet users to test user preferences and optimize their AI models at home, then export the tech overseas". In a world where data is very valuable, Chinese companies are playing to their strengths.
Bright's Banter
I'm taking a break from writing about luxury good companies to write about eggs, the kind that you eat. Cal-Maine Foods, the largest egg producer in the US, just reported huge quarterly earnings. Their profits soared despite bird flu outbreaks which wiped out chicken flocks, because egg prices have soared across the US. Conventional egg prices rose 152% compared to last year, and speciality eggs also sold well.
This was Cal-Maine's sixth straight quarter of accelerating earnings growth. They sold a record 1.1 billion dozen eggs in fiscal 2022. Sales doubled to $997 million and their profits went up by a staggering 718% to a whopping $323 million. There were no positive tests for avian flu at any of their production facilities.
Overall, Cal-Maine Foods has been crushing it lately, and it looks like they're only going to continue growing as long as egg prices stay elevated. The USDA predicts that egg prices will increase by another 29.6% in 2023. Mind you, chicken eggs are a boring commodity and sooner or later their prices will go down.
Linkfest, Lap It Up
Covid highlighted that Africa needs its own vaccine manufacturing facilities. BioNTech just began construction of a mRNA vaccine facility in Kigali, Rwanda - Now Moderna is building a factory in Kenya.
Strauss & Co auctioned an Irma Stern painting for R22.3 million. This is a new record for any African art - Children Reading the Koran in Zanzibar.
Signing Off
Asian markets are up this morning. Indices in Japan and South Korea led the rally and were also on course for decent quarterly gains. Positive signals from China continue, with fewer policy "own goals" and some good manufacturing data just out.
SuperSport announced that they don't have the broadcasting rights for the cricket IPL, which kicks off today. Last year the IPL sold the broadcasting rights for a record amount to Viacom18, and they wanted too much from SuperSport for the right to show the games to DStv viewers. Perhaps a last-minute deal with be struck.
US equity futures are flat in early trade, and will probably remain so until later today when the US consumer income PCE deflator (the Fed's favourite gauge for inflation) for March is released.
The Rand is trading at R17.83 after a surprise 50 basis point interest rate hike yesterday by the SA Reserve Bank. Bondholders will be fuming.
In other news. Stormy Daniels' lover with a 3-inch pole (allegedly, allegedly, ok) was indicted by a Manhattan grand jury, making him the first former US president to face a criminal charge and jolting his bid to retake the White House. In other court-related action, Gwyneth Paltrow won her court battle with an idiot old man, after a skiing accident back in 2016.
May your weekend be peaceful and rewarding.
Sent to you by Team Vestact.
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