Market scorecard
US markets softened last night, the S&P 500 and the Nasdaq ended their largest five-day winning streak in a year, after strong post-election gains. Republicans look set to control the House too, and they are known for tax cuts and big spending, so bond yields surged and the US Dollar reached a two-year high.
In company news, Home Depot's stock dipped 1% despite strong sales of stuff to repair houses after disastrous weather conditions in Southern states. Elsewhere, Tyson Foods climbed 6.6% after its chicken segment offset losses in its beef business. Finally, e-commerce platform-provider Shopify announced another strong set of results and rose 21.0%.
At the end of the day, the JSE All-share was down 0.67%, the S&P 500 fell 0.29%, and the Nasdaq was just 0.09% lower.
Our 10c worth
One thing, from Paul
American journalist and short-story writer Damon Runyon (lived from 1880 to 1946, pictured here) once said: "the race may not always go to the swift nor the battle to the strong, but that's the way to bet."
This is relevant to equity investing. The capitalist system is highly competitive, and only a few companies become dominant. The modern economy evolves and some industries go into decline, and others arise. The really great corporations keep evolving, increasing sales at good margins.
As your portfolio adviser, we work hard to position you as part-owners of the world's most attractive businesses. They are the swiftest and strongest we can find, and we are betting on them to win.
Byron's beats
Amazon is currently developing smart glasses for their delivery drivers, according to Reuters. The glasses will direct their staff during the final stages of a delivery, around and within buildings. The glasses will "provide turn-by-turn navigation on a small embedded screen."
According to some studies, the last 100 metres of a delivery are responsible for nearly half the cost. This makes sense. Getting to the general location is easy but finding a particular office or apartment block in a 50 story building is hard. I often see unfortunate Uber Eats drivers wandering aimlessly around our office building looking for their hungry, frustrated customers, while the food gets cold.
This sounds like a very useful innovation which will most likely make Amazon's already large lead in delivery that much wider. The company is always moving forward. Buy.
Michael's musings
Yesterday, Bidcorp released a pleasing set of quarterly numbers, and its share price jumped 6% higher. It's great to see this company do well, as they carry the South African flag across large parts of the globe. You will see their trucks on the road if you have an early run in most major European capitals.
Over 90% of Bidcorp's operations are now outside of South Africa, so the strength of the Rand has dampened their reported profits. They recently bought three more companies to bolt on to their global operations. Those operate in the UK, Belgium and the Baltic region, and will add an extra R3.5 billion in annual revenue.
The standout region for Bidcorp was the Eurozone, with revenue growth of 10%. The UK and Australasia picked up by 8% and 3%, respectively. Bidcorp has also found it tough going in China, like most multinationals. Luckily the group only has small operations in the region.
Interestingly, they reported a shift to more in-home eating as consumers cut back on spending. On the operations side of things, Bidcorp said salary increases in developed markets are now higher than inflation, and they are struggling to fill driver and warehouse operator positions.
We are happy holders of this well-run company, in our JSE portfolios.
Bright's banter
Prosus has announced an impressive $2 billion profit from its investment in Swiggy, India's leading food delivery firm. They have invested a total of $1.3 billion in Swiggy since 2017, for a 31% stake. That holding is now worth $3.4 billion at the IPO valuation. The stock listed today and has already popped 7%. Prosus is retaining a 25% stake in post-listing.
Swiggy's $1.3 billion market debut was heavily oversubscribed, attracting eight of the world's top ten fund managers. This success underscores India's growth potential and Prosus's strategic investments in the region.
Prosus showcased its ability to spot and leverage high-growth opportunities with this win. Continuing to seek out unicorns in India and adhering to this proven strategy could bolster its growth trajectory further.
Well done to Chief Investment Officer, Ervin Tu (pictured here).
Linkfest, lap it up
Have you bought new clothes recently? Some cheap items deteriorate after the first wash - The golden age of garbage clothing.
Can you taste the difference between a R1 000 and a R3 000 bottle of whiskey? This one costs R1.2 million a bottle - A one-of-a-kind Glenlivet scotch.
Signing off
Asian markets declined today, with the MSCI Asia Pacific index hitting its lowest level in nearly two months. Benchmarks in Hong Kong, India, Japan, and Taiwan sagged, but mainland Chinese markets managed to hold steady.
In local company news, Santam's recent trading update shows its underwriting performance was hammered by bad weather. So far, storm and drought-related claims have cost the company about R960 million after re-insurance offsets. Notably, the Western Cape floods in July 2024 caused a R133 million hit. Oof.
US equity futures are slightly lower in the early pre-market trade. The Rand is at R18.08 to the US Dollar. Eish, back above that psychological R18 level.
The US core consumer price index (CPI), set for release today, is expected to have increased at a consistent rate month-on-month and year-on-year compared to September's figures.
Adios amigos.