Nasdaq drags on Wall St as AI slowdown fears hammer Nvidia, chipmakers
Market Scorecard
The Fed inspired rally on Wednesday didn't last long. Wall Street started in the red yesterday and stayed that way. Tech stocks were especially weak. The silver lining is that the oil market was also hit hard. Yesterday, Brent crude prices fell from $68 to $62, and have now stabilised at around $63 a barrel. The oil market is a fine balancing act between supply and demand. Traders are starting to see oil inventory levels increase (too much supply) and are worried that the EU's slow vaccine rollout could hamper the short term economic recovery there (not enough demand).
A few EU countries had suspended the Oxford/AstraZeneca Covid vaccine due to concerns it causes blood clotting. Last night the European Medicines Agency announced that they have found no evidence of the vaccine causing these problems. Now it seems that many EU countries will start using it again.
Yesterday the JSE All-share closed up 0.37%, the S&P 500 closed down 1.48%, and the Nasdaq closed down 3.02%.
One Thing, From Paul
Humans keep moving forward, despite the occasional setback. Thanks to technology developed to produce mRNA vaccines for Covid, it would now seem that permanent protection against malaria is within reach.
Preventing malaria is a tough challenge because the Plasmodium parasite that causes the disease contains a protein that inhibits the production of memory T-cells, rendering ordinary vaccines ineffective. So we never acquire immunity. Infected mosquitos squirt the parasites into our bloodstream, and we can't fight back.
Using an RNA based platform, scientists at the Yale School of Medicine seem to have bypassed the problematic protein. They have patented the novel vaccine and further trials are underway.
Byron's Beats
Yesterday I wrote about Amazon (NASDAQ:AMZN) and its ability to grow successful businesses fast by targeting their huge client base. Here is an example of a business they are building using their own large workforce instead. Amazon is launching its medical care business for its employees and other companies across the US.
I have long been a fan of remote healthcare. Who wants to go to a doctors room full of germs and expired magazines to wait for half an hour whilst filling in numerous forms? A virtual consultation is a huge win for everyone in most cases.
Amazon Care already serves Amazon's staff of over 1 million persons, and now the telehealth service is becoming available for people who don't work for the company.
Healthcare in the US is ripe for disruption. It's no secret that their system is more expensive than most other developed countries. As Bezos famously said, your margin is our opportunity. Let's hope Amazon can bring down the price of healthcare in the US and around the world.
Michael's Musings
If you are a regular reader of this newsletter, you will know that the team at Vestact firmly believes that governments should do less and the private sector should do more. Egocentric politicians should step aside. This applies to governments worldwide, not only here.
In the recent Shoprite results, we saw another example government overreach, with Covid lockdowns giving rise to unintended consequences. By telling private individuals what they could and couldn't buy, they pushed customers to the black market and permanently strengthened illegal supply chains.
I'm not a smoker and I get grumpy when someone lights up near me, but I thought the ban on cigarettes last year was utterly idiotic. It looked more like an attack on the tobacco industry as a whole.
History has shown that a completely free market doesn't work, and I think that the government has a legitimate role to play in society. In most cases though, less government interference is better for everyone.
Bright's Banter
Website building company Squarespace managed to raise $300 million in a funding round that valued the business at $10 billion. This valuation is almost as much as its listed competitors GoDaddy and Wix, give or take a couple of billions of dollars.
Squarespace was founded in 2003 by Anthony Casalena, offering online website creation and web hosting services. The company bootstrapped its own growth until it got Series A funding of $38.5 million in 2010, a round that was led by Accel and Index Ventures.
Fast forward a couple of years and Squarespace bought Acuity Scheduling and UnFold in 2019. These purchases added the functionality that helped small businesses manage their appointments and also allowed social media users to create stories across different social media platforms.
Last year, the company made $300 million in revenues, was cash flow positive, and profitable! These guys have played a big role in helping all of us create websites without learning how to code in HTML. There's definitely a big market for their services.
Signing Off
Asian markets have followed the softer trend in the US last night and are mostly red this morning. The Rand is been holding its own over the last few days and is currently trading at $/R 14.75. Enjoy the long weekend!
