Nasdaq drags on Wall St as AI slowdown fears hammer Nvidia, chipmakers
Market Scorecard
US markets had a lovely surge upwards yesterday. The S&P 500 and tech-focused Nasdaq both had their best day since March. The Vestact team goes to bed happy on days like these, knowing that our clients are making money. Historically, December is the best month on Wall Street. It gets cold in New York and investors buy stocks.
This rally probably came on the back of a Mzansi study showing that the Pfizer (NYSE:PFE) shot provides a partial shield against the Omicron variant. So far, new cases haven't overwhelmed our hospitals, and vaccine developments are promising.
In company news, Vir Biotechnology (NASDAQ:VIR) closed up 12% after the immunology company and its partner, GlaxoSmithKline (LON:GSK), said their Covid-19 antibody treatment proved effective against the Omicron variant in lab studies. Elsewhere, Intel (NASDAQ:INTC) announced plans to list Mobileye (F:0ME), its subsidiary that develops self-driving cars and advanced driver-assistance technology.
Here are the market vitals after a very good day. The JSE All-share was up 2.71%, the S&P 500 rose by 2.07%, and the Nasdaq gained 3.03%.
One Thing, From Paul
Elon Musk is the man of the moment. He's the richest person on the planet and his companies Tesla (NASDAQ:TSLA) and SpaceX are doing amazing things.
This 30-minute interview with him was recorded yesterday at a Wall Street Journal event, and is free to air on YouTube. It's a very wide-ranging summary of his views, in his own voice. He certainly speaks his mind! Plus he has an interesting new haircut.
Watch it here.
Byron's Beats
Benedict Evans does an annual slide show which looks at the world of tech which is always worth sharing. This time he looks at the past, the present and the future. As investors in this sector, his views on the future are most intriguing.
The presentation explains what the term Web3 means, and what a decentralised internet could look like. He talks about Cryptos and NFTs, and notes their pros and cons. He also explains what the metaverse is all about, if that concept was confusing you.
As for the present, it was encouraging to see the cloud is still in its early stages of adoption - only 20% to 30% of workflows currently use cloud computing. The big cloud players, Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOGL), have big upside potential.
Michael's Musings
As the year winds down, we can reflect on how our lives have changed, what we've achieved and what we never got around to doing. Bill Gates (am I still allowed to quote him?) once said that people overestimate what they can do in a year, but underestimate what they can do in a decade.
The human mind has many biases. It struggles to differentiate between long periods of time. Thinking ahead, a year seems like a long time and ten years only feels slightly longer than that. Our minds also battle to conceptualise exponential growth.
Compounding doesn't only apply to money, but most of what we do in life. Knowledge, experience and your networks all grow exponentially, if you allow them to. The base you built yesterday will enable you to be more productive today, and so the cycle repeats itself.
I came across this thought-provoking blog yesterday, where the writer talks about being patient but pro-active, The Long Game Always Wins. Here is his opening thought: "If you give yourself enough time, you can achieve almost anything".
Bright's Banter
Meta's Instagram is working on a tool that will encourage users to take a break from mindless scrolling. This new initiative is to help teens with their mental well-being. According to Bloomberg, the photo-sharing app will let users opt to see a pop-up message when they have spent a lot of time looking at a particular topic, suggesting they explore other subjects.
Users will also get nudged to take a break, based on minutes spent on the app. The other option will be a reminder to do some physical activity like going for a walk, meditating or exercising. As a Meta shareholder, I'm keen to see how this is implemented and whether it works according to plan or leads to a different outcome.
Signing Off
Asian markets are mostly up this morning. Hong Kong was lagging, but has just popped into the green. Chinese authorities are scrambling to limit the fallout from failing property developers, Evergrande (HK:3333) and Kaisa Group (HK:1638).
US futures are positive, indicating another day of gains. The Rand has strengthened to R15.85 to the US Dollar. Could it be that the failure of the ANC proposal on land expropriation in Parliament yesterday has improved our investment outlook? Just a thought.
In the words of Tupac, keep ya head up.
