Market scorecard
US stocks climbed for a second consecutive day as the feeling grows that Trump is scared of the markets. While traders welcomed his more conciliatory comments, it would be naïve to think that we are out of the woods. Treasury Secretary Scott Bessent also tempered the optimism, saying there has been no formal US offer to cut tariffs on China.
In company news, Boeing jumped 6% after delivering first-quarter results that topped analyst expectations. Elsewhere, Boston Scientific rose 4.2% as it reported a 20.9% year-on-year increase in net sales, highlighting strong demand for its medical devices. Finally, solar tech supplier Enphase had a very rough day, down 15.7% after a big miss on both the top and bottom lines.
At the close, the JSE All-share was down 0.07%, but the S&P 500 rose 1.67%, and the Nasdaq was 2.50% higher. A good outcome, although we did retreat slightly from intraday highs.
Our 10c worth
One thing, from Paul
There's an old song by Neil Sedaka called Breaking up is hard to do. I just checked and it was a hit in 1962 and again in 1975. If you are my age or older, you might be inclined to look it up on YouTube, and see if it sounds familiar.
I was thinking of that song today as I was reading about the ongoing antitrust actions against Google, Meta, Amazon and Uber. These companies are all deemed to be too big and too powerful, and too dominant in their respective industries.
In most of these legal processes, the remedy the US Department of Justice or the European Commission seeks is a breakup. For example, Google must sell off the Chrome browser, or Meta must dispose of Instagram or WhatsApp or both.
The cases are ridiculous. These companies are being persecuted for being successful. They all have strong competitors, and the markets they serve are very dynamic. In other words, the accusations are flimsy, and may very well fail when they come before a judge.
Note too, that split-ups are not especially troublesome for shareholders. They may even unlock some value.
Michael's musings
Tesla delivered some horrible numbers on Tuesday night, but the stock still closed up 5.4% yesterday. The jump higher was solely based on Elon Musk saying that he will pull back from his role at DOGE and focus more time on Tesla. You can see how closely Musk is tied to the company's forecast for the future.
Tesla sold 50 000 fewer cars in this quarter compared to a year ago, and 159 000 fewer cars compared to the previous quarter. Given that Tesla is priced as a growth company, they should be growing strongly each quarter, not going backwards. Even worse, they are selling these cars at lower prices.
Overall, revenue for the quarter was down 9.4%, driven by the 20% drop in car sale but helped by a 67% rise in energy and storage sales. Due to uncertainty about tariffs, management has also removed forward guidance.
It isn't all doom and gloom. Tesla is still the most profitable EV maker in the US, well ahead of their EV competitors. Added to that, the company reiterated that production of a new, more-affordable car will start in June this year (that's it pictured below). Having a new car that can sell for less than $15 000 will be a great addition to the stable.
Tesla has $37 billion in cash, which gives it plenty of runway to weather the current negative public perception of the brand and the global trade uncertainty. I remember when Tesla had less than 2 weeks of cash in the bank; that was truly a make-or-break moment. We are not there now.
The future value of the company isn't in EVs though, that is already priced into the shares. The future rests on Musk's new product ideas, in particular Optimus robots and Robotaxis. Quick execution on these two projects will underpin the market capitalisation. If those projects fail or competitors beat them to it, there will be more pain to come in the share price.
Bright's banter
Meta released a new set of smart glasses dubbed the Hypernova, a premium AR wearable set to launch by year-end at a price north of $1 000. The device will feature a monocular display in the right lens, which can be used for notifications, apps, and media beamed directly into your field of vision. The glasses will be paired with gesture controls enabled via a neural wristband.
This isn't just another tech toy. It's a heavyweight collaboration: Qualcomm provides the chips, Alphabet the OS, and Ray-Ban (EssilorLuxottica) the frames. Meta's current Ray-Ban Meta Glasses have already gained surprising traction, and the company hopes to build on that with this significantly more advanced model.
There's also a Supernova 2 in the works, a sport-focused variant designed with Oakley, aimed at cyclists and other athletes. Long-term, Meta is investing in full-fledged AR hardware, with codenames like Orion and Artemis still in development.
Linkfest, lap it up
AI is very good at crunching data. Some tasks are perfect for the new tool - Instagram is using AI to find teens lying about their age.
Argentina is poised to win a $20 billion new program from the International Monetary Fund (IMF). It may achieve lasting economic stability - Javier Milei is working miracles.
Signing off
Asian stocks are mostly higher, tracking Wall Street's upbeat tone after President Trump hinted at a softer stance on China trade talks. Beijing also signalled a willingness to return to the negotiating table, provided the US pauses its threats. We live in hope.
In local company news, Capitec grew headline earnings by 30% to R13.7 billion for the year ended Feb 2025. Personal banking contributed 44% of profits, while strategic initiatives and insurance combined for 50%, and business banking added 5%.
US equity futures are marginally lower pre-market. The Rand is trading at around R18.66 to the US Dollar.
Google will report earnings after hours this evening. We have 938 clients who own this one, so we will be watching closely.
All the best.