Stock Market Don’t Care

Market Scorecard


US markets closed up again yesterday, as leaders of western nations gathered in Brussels in a show of unity that must surely put Russia on the back foot. All eleven sectors of the S&P 500 rose, with semiconductors and materials stocks leading the charge.

Year-to-date, the S&P 500 and Nasdaq Composite are still down, by 5.2% and 9.3% respectively. This market recovery is two weeks in, and gathering momentum. As we always say, having a long time horizon smoothens the volatility out and patient investors get rewarded.

In company news, Nvidia rose 9.8% and Intel rose 6.9%, as investors bet that booming demand for chips would overwhelm short-term logistical problems.

At the closing bell, the JSE All-share closed down 0.65%, the S&P 500 gained 1.43%, and the Nasdaq tacked on another 1.93%.




Our 10c Worth


One Thing, From Paul

People are living much longer than they used to. This is due to better living conditions, healthier diets, effective medicines, less smoking, stronger seat belts, etcetera.

If you are fit and well-off you can reasonably expect to see your 90th birthday. That’s just my guess, based on looking at the longer averages in the lifespan data from rich countries. What will you do if you retire at 60, and then live for another 30 years? Time for some Friday advice.

For starters, you’ll have to save more money to pay for your future living expenses. Consume less now to be more comfortable later. Alternatively, don’t retire, keep working to keep earning. I like the sound of that, personally.

Once you do quit working you’ll need to find some new activities to keep you mentally sharp. Those could include a new small business, part-time gig or volunteering.

Finally, take care of your relationships. Nothing is more important in later years than to love and to be loved back.


Byron’s Beats

Ten years ago South Africa was considered the gateway to Africa. Our big companies were opening new divisions all over the continent and large equity investors were buying up JSE-listed shares to get more developing country exposure. At the time South Africa was booming and the rest of the continent was thought to be the final frontier for growth, in an area that was still modernising.

Unfortunately, that thesis has not materialised at all. Local companies mostly failed to prosper outside our borders, and we’ve seen a slowdown in foreign investment in South Africa. But that might be turning. I was very pleased to see Prudential Financial, a US-listed financial services firm with $1.5 trillion under management, announced that they are buying a 15.1% stake in Alexander Forbes.

We’ve also seen Mondelez sniffing around AVI, Heineken attempting to buy Distell and a few other smaller deals on the cards. Ironically, the war in Eastern Europe makes South Africa look more attractive to investors. Our government bonds have certainly enjoyed strong inflows lately.

Foreign Direct Investment is a good thing, so let’s hope it accelerates.


Bright’s Banter

Google announced that it would let Spotify use its own billing system for users who subscribe to the music-streaming service through the Google Play store. This means Spotify doesn’t have to pay the hefty 15% levy as Google slowly opens up its app store, and is a step in the right direction in order to appease angry regulators. As a Spotify shareholder, I approve!

I do understand that Google has to be paid for spending billions of dollars building its app store but the lines get blurred when they create a competing product to Spotify. Google Music now has an advantage as it doesn’t incur the same levies.

Spotify is not entirely off the hook. In South Korea, where lawmakers forced app stores to offer alternative payment services, Google still charges app developers 11% in fees. In the Netherlands, Apple responded to a regulatory order covering dating apps by allowing third-party payments but are still charging a 27% fee.

This move by Google puts a ton of pressure on Tim Cook to do something about fees in the Apple App Store. According to Sensor Tower, consumers spend over $85 billion there, compared to Google Play’s $48 billion. The search giant’s core business is advertising, this gambit makes them look good while throwing dirt at Apple. Let’s see how Tim Cook responds.






Linkfest, Lap It Up
Bulgari is celebrating the 10th anniversary of its Octo Finissimo collection by creating the world’s slimmest mechanical watch. It measures just 1.8 mm from front to back. There’s also a QR code engraved on the mainspring barrels that links to an NFT artwork to authenticate the timepiece – The $440 000 Octo Finissimo Ultra watch.

Bloomberg analysed eight months of Netflix viewership data to find out what’s popular. Their findings might help you find some cool content you’ve missed – These are Netflix’s most popular shows.




Signing Off


Asian markets are lower today, and Chinese technology shares are down again, which is very disappointing. Oil prices have steadied, but traders are unclear about the real availability of Russian crude. So far, European Union leaders have refrained from announcing new steps to cut those imports, but a ban could come soon.

US equity futures are steady in early trade. It would be great to end with another strong session on Wall Street, to cap off a good week of gains. The mighty Rand is at R14.49 against the US Dollar after a 25 basis point rate hike here yesterday.

Enjoy the weekend.

Sent to you by Team Vestact.

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