Bitcoin struggles above $77,000 as rising exchange reserves weigh on sentiment
Market Scorecard
Markets had a good day yesterday. European markets and the JSE All-share all had strong closes and that strength continued into the US open. The US market even gained strength as the trading day went on. Then, with 45 minutes left of the trading day, Trump took to twitter and the market fell like a stone. As you can see from the red figures below, the US market gave up all their gains and then went backwards for the day. Trump tweeted that he will hold a press conference on Friday to announce new measures against China due to mainland China's imposition of a security law onto Hong Kong. The market is not sure what measures will be announced, so it is a case of sell first, then see what comes from the announcement.
Yesterday the JSE All-share closed up 1.77%, the S&P 500 closed down 0.21%, and the Nasdaq closed down 0.46%.
One thing, from Paul
What's going on with Vestact recommended stock Illumina? Bright did cover their first quarter numbers on the 6th of May, which were solid enough although the management team sounded anxious and withdrew earnings guidance for the rest of 2020. Since then the stock price is up a heart-warming 20%!
You will recall that Illumina (NASDAQ:ILMN) makes genetic sequencing machines and the consumables that they use when performing analysis of human DNA and other genetic material. Their top customers are companies like 23andMe and Ancestry, which are consumer-facing services that allow one to send in saliva or another sample to get tested.
One reason for the stock price uptick could be that these companies are all collaborating on major Covid-19 genetic studies. Researchers are probing DNA in search of clues about why some Covid-19 patients get so much sicker than others.
23andMe is recruiting 10 000 people who were hospitalised with Covid-19 and then analysing their DNA closely. This is what is called a genome-wide association study, where the genetic data of lots of people is mined in an attempt to discover useful correlations. In the past, 23andMe has provided genetic data for studies on depression and bipolar disease, lupus, inflammatory bowel disease, and Parkinson's disease.
Ancestry has its own study going on where it is surveying 250 000 existing customers to find those who later tested positive for Covid-19 and were hospitalised with the disease, then digging deeper into those customers' data.
Byron's Beats
My Colleague Michael has been speaking a lot about the pros and cons of working from home. Clearly, for many businesses it is very doable. But what about camaraderie and company culture? Maybe the solution is to rotate or have people working three days at the office per week? I suppose each company will find its own best formula by trial and error.
This WEF article covers Facebooks approach to the matter. Facebook staff have the option of working from home permanently. However there is a catch. If your living expenses come down because you relocate to a cheaper area, then so will your salary. I suppose that makes sense?
The movements of property prices are also going to be interesting. Areas further from CBD's with lots of sun and space might see a spike in demand. Some US states have lower taxes than others. That will also be a decisive element.
And then there is the price of commercial property. With less people in the office, the demand for commercial offices will also drop. We will just have to watch the evolution with interest.
Michael's Musings
In my first stats lecture, the professor made the point that you can torture stats to tell you anything you wanted. The easiest way to do this is through presenting data in different graphs. For most readers, they only look at the pictures created by the graph and sometimes don't even look at the axis's. Are the graphs below saying the same thing?
Yes they are. It is the same data just with different scales on their Y-axis. It is normal to show exponentially growing data on a logarithmic scale as it helps to put the change in perspective. In a logarithmic graph, the line drawn shows you the rate of change.
The problem is that many people don't read the graph and make snap judgements about what the data is saying. When a group of 200 people were split into two sub-groups, the group that saw the linear graph were much more worried about the Covid-19 virus. However, those who saw the graph on the right were less worried.
So depending on the message you are trying to drive, you can present the same data but on a different graph, and then get a different response from the general public.
Signing off
This evening Jay Powell will be doing an online Q&A session, we are not likely to hear anything new from him though. Oil prices are down this morning and US futures are pointing to a weaker open later. The JSE All-share is in the red and the Rand is slightly weaker at $/R 17.47.
