Market scorecard
Global markets rallied again yesterday after US inflation slowed to its lowest level in over three years. US CPI rose by only 3.3% versus the market expectation of 3.4%. Stocks and bonds jumped, and the US Dollar got weaker. Later in the day, the US Fed reaffirmed the market's expectation of a rate cut towards the end of the year. We've been waiting for these developments, and now we feel pretty good.
In company news, Oracle had an excellent day (+13.3%) thanks to better than expected results and strong cloud business forecasts. Apple maintained the previous day's momentum, closing up another 2.9%, and bringing it to level pegging with Microsoft's market cap.
Yesterday the JSE All-share closed up 1.28%, the S&P 500 advanced 0.85%, and the Nasdaq jumped 1.53%. All-time highs again, thank you very much.
Our 10c worth
One thing, from Paul
Quite a few of our Johannesburg-based clients are moving to the Western Cape. This is understandable, because Gauteng is a mess and the Cape is beautiful, and the municipalities down there are well-run.
The transition is not easy. Selling a top-end home in Joburg is difficult and so is finding an affordable one in Cape Town. I'm happy to stay put in Joburg. As travel writer Chris Arnade says, there's no perfect place.
"I think a lot of the travel industry, both the glossy high end magazines, and then all of the social media influencers, as well as egg-head over thinking types like me, tend to give people the impression there's a fantasy land to be found, if only you travel enough you will find it. The city, or beach, or country that fits your needs so well, that you will find true contentment, or your true self, whatever that is."
"Yet, you can't escape, no matter how much you might try, the drudgery, ordinariness, and messiness, of life. Every place comes with some frustrations, ugliness, and in the more highly touted places, a lot of contrivances."
"I don't think that's a bad thing, because I'm not sure I want to escape from all of those things, which are a central part of being alive. Or to put it another way, I've learned to appreciate the mundane."
Byron's beats
Yesterday I wrote about the US Dollar and its appreciation versus the Euro and the Yen over the last decade. I had not realised that the Bloomberg Dollar Spot Index, which tracks the performance of the USD versus 10 leading global currencies, was sitting at a new high for the year after climbing 1.1% on Tuesday.
I mention this because we are constantly judging our local Rand versus the US Dollar. Sometimes, we forget that dollar movements are more influential than what is happening at home, especially at a time when there is a lot of action on the political front in Mzansi. The Rand weakness at the beginning of the week had more to do with a strong Dollar than a so-called GNU.
Case in point, yesterday CPI came in lower than expected. Stocks went higher, but the US dollar weakened because expectations are that yields on US treasuries will start coming down. The Rand is now trading at a relatively strong looking $/R18.40. Maybe a good time to buy more USD?
Michael's musings
US broadcasters are busy falling over themselves to buy up live sports rights. There is nothing like live sport to get millions of people to tune into your platform. There was last year's record IPL broadcast deal, Apple tiptoeing into football (soccer), Amazon expanding their NFL presence and the NBA getting 2.6 times more for its new broadcast deal than the old one.
On Tuesday, Warner Bros. Discovery announced that it had signed a 10-year contract with the French Tennis Federation, to broadcast the French Open in the US, for an average of $65 million per year. I would have thought that one of the tennis majors would be worth more than that?
For comparison, the $76 billion NBA broadcast deal, is valued at $6.9 billion per season. Amazon paid more ($75 million) to broadcast just one day of NFL games. Apple paid $2.5 billion ($250 million a year) for a ten year deal for US Major league Soccer. I suppose it all comes down to the spending power of the audience. The US has 300 million people with large buying power watching sport, and that is very valuable to advertisers and sponsors.
Linkfest, lap it up
Samsung is a well-known global brand. The company started out selling food, and then diversified - From noodles to smartphones.
A low-carb diet may help with irritable bowel syndrome. In a study, seven out of ten participants reported significant reductions in symptoms - Gut health.
Signing off
Eastern markets are mixed again today. Sydney and Hong Kong are moving higher, but Shanghai, Seoul and Tokyo are going down.
In local company news, Spar's share price popped 12% on the news that it had reached terms to sell its Polish operations. Another case of a South African company struggling to expand into a new countriy, as the group wasn't able to replicate the success achieved from its Irish operations.
US futures are mostly unchanged, and thanks to a weaker USD, the Rand is trading at $/R18.42. Today is Elon Musk's much anticipated vote (again) on his pay package. It seems likely to be approved, but we will know for sure tomorrow morning.
Have a good one.