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Market scorecard
US markets closed in the red last night, as stocks pulled back from all-time highs. An oddly disappointing forecast from Walmart (after releasing a stellar earnings report for 2024) raised concerns about the economy's main engine, consumer spending. Banking shares also weighed on the market, with JPMorgan, Morgan Stanley, and Goldman Sachs sliding over 4%.
In company news, German footwear company Birkenstock fell 4.7% after announcing faster sales of its high-end sandals and clogs, but not raising its financial targets. Elsewhere, Shake Shack rose 11.2% on strong hamburger sales and juicy margins. AppLovin flopped 8.9% after being targeted in a scathing report by short-seller Edwin Dorsey.
Izolo, the JSE All-share was up 0.60%, but the S&P 500 fell 0.43%, and the Nasdaq was 0.47% lower. It's ok, we'll live.
Our 10c worth
One thing, from Paul
Here's some advice (because it's Friday, and I have your attention for a moment): lead a quiet life and celebrate your quirks.
Susan Cain is the author of a book called Quiet and Bittersweet and has an interesting Substack. That's her in the picture.
She says: "If you want to live a quiet life, live a quiet life. If you're a humble person who has no use for the spotlight, be a humble person who has no use for the spotlight. No big deal."
Do the things that you love, just for the sake of them, even if they seem quirky and pointless to others. Do what you like in your free time, because it's beautiful to you. Don't seek external approval, just keep doing your own thing. Leave the rat race.
Byron's beats
The gold price is at an all-time high and gold bugs are feeling smart. I'm afraid I'm going to burst their bubble. According to YCHARTS, gold has underperformed the S&P 500 by 8.3% per annum since 2010. Over that 15-year period, the S&P has achieved an annualised return of 13.9% while the gold price has only grown by 5.6%. That's poor.
Gold bugs will tell you that bullion represents a "flight to safety" and is a good anchor for your portfolio. Not so fast. Since 2010 the standard deviation of the S&P has been 15.8% while the standard deviation of gold has been 13.8%. That means that gold has only been slightly less volatile than stocks.
Is it really worth sacrificing 8.3% per annum in returns for 12% less volatility? That makes no sense to me whatsoever.
Michael's musings
Yesterday, I was scrolling through my Capitec banking app and noticed that they now offer international transfers. I think the service has been available for a while, but I don't use my Capitec account often.
Generally, the banks fleece you when you do a forex payment. They charge a high service fee and then give you a terrible exchange rate, usually a spread of around 2.5%, meaning the bank adds roughly 40c - 50c onto the exchange rate. That can add up quickly with large payments!
I was very pleased to see that Capitec charges a low service fee and they only add about 8c onto the exchange rate. That's a better deal than many currency transfer companies offer, who market themselves as a cheap way of doing forex payments.
So, if you are like me, with an extra account at Capitec, make sure to use them next time you want to make an international payment.
Bright's banter
Airbnb shares jumped 14% last week Friday, its biggest gain in two years, after the company forecast strong demand for the first quarter of 2025, following a solid holiday travel season.
Bookings are expected to grow at a steady pace, matching last year's 8.5% increase (excluding the 2024 leap year day) and slightly beating Wall Street's 8.3% estimate. Growth was broad, led by Asia Pacific and Latin America, while North America also saw a mid-single-digit boost.
Airbnb is pushing ahead with expansion plans, investing $200-$250 million in new revenue streams like Airbnb Experiences and premium services such as personal chefs and in-home massages.
The co-host marketplace, which helps hosts hire property managers, has already grown to nearly 100 000 listings, earning about twice as much as comparable properties. The service is set to expand to Japan and Korea soon.
Linkfest, lap it up
A Japanese sword found its way back home after 80 years. An American soldier in World War 2 took it home in 1945 - Family heirloom returned to its rightful owner on the island of Kyushu.
Ben Carlson is well-read and has interesting opinions. He penned some of his recent observations here - Deep finance thoughts.
Signing off
Asian markets are mostly higher this morning. Alibaba reported its strongest revenue growth in over a year and its stock price soared as much as 13%. For the record, it still has one hell of a long way to go, before it recovers its all-time highs of October 2020.
In local company news, AECI has warned of a tough year ahead, with earnings expected to take a significant hit. The diversified chemicals group anticipates a 72%-77% drop in basic earnings per share from continuing operations.
US equity futures are marginally higher pre-market. The Rand is trading at around R18.34 to the US Dollar.
Have a happy Friday and a good weekend.
