Singles Day is Yuuge

 

Market Scorecard


Yesterday was ‘singles day’, 11/11, the day where people celebrate being single. For most Chinese though, the day has morphed into the biggest shopping day of the year. In 2008 Alibaba launched their singles day specials, now ten years later the day is huge! Yesterday Alibaba sold $30.8 billion worth of merchandise through their webpages and stores, an increase of 27% from last year. In 24 hours, Alibaba sold more merchandise than the entire South African economy generates in a month!

Those numbers put into perspective how big China really is. While reading this fortune article on singles day, they highlight how much bigger the Chinese middle class will become over the next decade. The middle class is the engine of any economy, so their prosperity is important. Here is the full article – Alibaba’s Singles’ Day Hits Another Record: 3 Takeaways Beyond The Big Number

“Citing an OECD forecast, Tsai said China’s middle class would almost triple by 2030, to 850 million, from 300 million.”

 

On Friday the JSE All-share closed down 1.42%, the S&P 500 closed down 0.92%, and the Nasdaq closed down 1.65%.

Our 10c Worth


 

One thing, from Paul

I have had a front row seat, watching economies evolve, markets move and companies develop over the past 25 years. What a wonderful job this is!

I’m always intrigued to find occasional insights which run counter to the prevailing wisdom. For example, Angel Talavera, the Eurozone Economist at Oxford Economics points out that if you adjust for population growth, the Eurozone has done just as well as the US during the current economic cycle.

In other words, the US grows faster but has a higher population growth rate, so in constant GDP per capita terms, Europe is doing just as well. That is not the conventional view, which is that Europe is a bit stagnant, has too much regulation, has an ageing population and is a bit sclerotic.

It should be noted though that the time frame chosen for the chart above is a bit sneaky. If you go back to 2008, it’s clear that the US had a quicker recovery from the financial crisis, due to swifter action by the Fed, as compared to the more tentative ECB. I suppose it depends on what you mean by the “current economic cycle” – five years or ten years?


 

Byron’s Beats

Throughout Oil’s recent surge in price I have felt that it was too high and due for a pull back. I am no commodities trader, and I have 0 skin in the game, so take that from where it comes. Of course, as a consumer I do have skin in the game, and I also know that inflation is currently a big threat to our economy. So naturally I get frustrated that in 2018, the OPEC collusion is still alive and well, ripping off consumers worldwide.

Having said that, we have seen cracks form within the collusion. And when prices go up, the producing nations cannot help themselves and pump their own production. Prices have dropped 21% over the last 5-weeks. This couldn’t come at a better time for the SA consumer. Long may it continue.


 

Michael’s Musings

Bloomberg recently had an article which looked at the threat of automation on current jobs. There is no doubt that a machine will replace some jobs. The big question is, when everything settles will it be net positive or negative?

The article points out that roughly one in every two jobs is at risk of being replaced. History shows that as technology changes the workplace, it makes some jobs redundant, but it also creates new ones.

The article concludes that it is impossible to know how our labour market will change. The optimist in me says that technology will make our lives better, not worse.

“A famous case of this is how ATMs were predicted to reduce the number of bank tellers. In fact, the number of tellers per branch did fall substantially, but banks opened a lot more branches, in part because ATMs made it cheaper to do so. As a result, the number of bank tellers actually increased. . .”

 

Here is the article – Don’t Expect Robots to Take Everyone’s Job.

Linkfest, Lap it up


Modern medicine never ceases to amaze. Have you ever tired to avoid eating gluten? It is very difficult, particularly when you are out with friends – Gluten-free fix? What to know about an experimental treatment that could let celiac disease sufferers eat gluten.

This looks amazing. The hotel has been under construction for 10-years – You’ll soon be able to stay in an underground hotel built inside a giant quarry, where some rooms are underwater

Vestact Out and About



Signing off


It is Veterans’ Day in the US, where some states have a holiday and others don’t. The stock market will be open but the bond market will be closed, in general though you can expect lower volumes to come through. Vodacom released their 6-month numbers this morning, at first glance they look at bit light on growth. We will have to see how the stock opens today. The week ahead holds many more releases from South African companies, and then on Wednesday there is key economic data out of China.

Sent to you by Team Vestact.

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