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US markets closed higher ahead of the Thanksgiving holiday. So far, November has proven to be the most favourable month for markets since July last year, with the positive trend attributed to moderating inflation. Yesterday, ten of the S&P 500's eleven sectors closed in the green.

In company news, Deere shares lost 3.1% after the manufacturer of farm equipment released an outlook that showed a drop in revenue and profit for its tractors, crop harvesters, and other machinery. Elsewhere, Nvidia (NASDAQ: NVDA ) finished the day down 2.5% even though their earnings and sales came in ahead of the street's expectations.

Let's have a look at the performances, the JSE All-share closed up 0.66%, the S&P 500 rose 0.41%, and the Nasdaq was 0.46% higher.

One thing, from Paul

Here's an interesting take on financial products that I have not seen before. It was written by Robert Armstrong, a US market financial commentator for the Financial Times of London.

"When rich people lose some money, that is good. The finance system works well when investors are protected from excessive confidence and credulousness by regular but non-catastrophic losses, whether at the hands of incompetent practitioners or market cycles. This prevents bubbles from inflating and subsequently popping."

It sounds absurd to say that losses are good, but he does have a point. Vestact clients saw their portfolios go down sharply in 2022. That was horrible, but it's good to be reminded that markets go down sometimes. That's how you know that you own real shares, that are going through a bad patch, not some fake financial instrument, or slice of an opaque fund.

If we do our jobs properly, we'll get you invested in some hugely successful companies like Apple (NASDAQ: AAPL ), Microsoft (NASDAQ: MSFT ) and Nvidia. However, we aren't perfect and sometimes we'll put you into turds like PayPal (NASDAQ: PYPL ) and Illumina (NASDAQ: ILMN ).

Eventually we'll ask you to sell the losers, but we'll stay fully invested in our winners.

Byron's beats

When the market rallies, there are always sceptics. Markets are now around 3% away (including dividends) from the all-time highs reached in December 2021. Is that justified? The best evidence to look at is earnings, in my opinion.

The last quarterly results have elevated S&P 500 earnings to the highest level in history, at $210.48 (aggregated for all 500 stocks). The previous high was in the first quarter of 2022 at $210.16. During that period, the market dipped and recovered just like the earnings have. Sometimes markets do not make sense but very often, in hindsight, they behave just the way they are supposed to.

The big difference between now and the highs of 2021 is that interest rates are 5% higher. Interest rates will come down soon, and that's a huge potential tailwind for markets in future. In other words, the road ahead looks very promising.

Michael's musings

Axios has noted that Zoomers (Gen Z) will overtake boomers in workplace numbers next year. The composition of the labour force is significant for both how companies operate and what products get sold. Zoomers, for example, spend more on experiences than any previous generation.

I'm interested in seeing how corporate work culture changes as Zoomer numbers increase. Managers that I speak to say that they dread hiring more Zoomers. The perception is that they are big on telling managers how to improve the work-life balance of a company, but are not fans of receiving constructive criticism themselves. Then, when the pressure is on, the Zoomer is nowhere to be seen because they have taken a 'mental health day'.

I wonder if baby boomers had similar trepidations when they started hiring millennials? For our more experienced readers, please hit reply and share any interesting stories about generational shifts in your workplace.

Bright's banter

Live Nation Entertainment, the events promoter that owns Ticketmaster, reported its biggest quarter ever with a 32% increase in revenue to $8.2 billion in Q3. The company's profitability was nearly $484 million, reflecting the record ticket sales it achieved this year.

Live shows have become incredibly popular, as evidenced by a record-breaking 140 million tickets sold so far in 2023, already ahead of the entire tally for 2022. Despite criticisms such as extended wait times and inflated resale prices during Taylor Swift's Eras Tour, the appetite for live concerts remains strong.

Noteworthy tours from artists like Swift and Beyonce (which I attended in Frankfurt, Germany) have contributed to this surge, yet Live Nation President Joe Berchtold downplays the impact of individual star power, asserting that no single artist can significantly affect the company's annual performance.

The Northern Hemisphere summer, traditionally a peak period for concert sales, witnessed extraordinary success with tours by popular acts like Harry Styles, Coldplay, and Pink, generating up to $300 million each. The average ticket price for the top 100 US tours in 2023 has seen a substantial increase to approximately $120, marking a $58 jump from just two years ago.

Looking ahead to 2024, Live Nation is poised for continued growth, having already secured two-thirds of its commitments for the upcoming year, half of which are slated for large venues.

Signing off

Asian markets are mixed this morning. Benchmarks fell in Hong Kong, while they rose in mainland China and South Korea, even though trading volumes remained thin. Japan seems to be closed for something called Labour Thanksgiving Day.

In Europe, far-right lawmaker Geert Wilders won the Dutch election and said he plans to hold a referendum on leaving the EU. Sigh. Even though his party won the most seats yesterday, they only have 35 seats, well short of the 76 needed for a majority.

The Rand is now trading at around R18.86 to the buck.

The US market is closed today for Thanksgiving, and only trades a half day tomorrow. It is going to be slow around here!

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