Wall Street ends down, calls for AI slowdown pummel chipmakers
Market scorecard
US markets finally rebounded yesterday thanks to optimism about tech company earnings coming this week. Nvidia (NASDAQ:NVDA) led the gains of the big-cap giants, up 4.4%. The S&P 500 ended a six-day losing streak, with each of its eleven sectors finishing the day in the green.
In company news, the Chinese tea company Sichuan Baicha Baidao Industrial took a big hit, dropping more than 31% during its first day of trading on the Hong Kong stock exchange. Elsewhere, Tesla (NASDAQ:TSLA) fell another 3.4% after reducing the price of its full self-driving (FSD) software from $12 000 to $8 000. Lastly, Verizon (NYSE:VZ) slid 4.7% because its quarterly revenue missed Wall Street's forecasts.
In summary, the JSE All-share was up 0.26%, the S&P 500 rose 0.87%, and the Nasdaq was 1.11% higher. Ah, that's better.
One thing, from Paul
Human energy knows no bounds. The shot below was taken in Singapore this morning, by me, and shows the Asian headquarters of many major global banks. Up until 1950, that area was a swampy quayside with a few old colonial buildings.
Singapore has had excellent government for many decades, and was modernised under Lee Kuan Yew, the Prime Minister from 1959 to 1990. The land area of this island state has grown by 25% since independence, thanks to many reclamation projects.
The weather here is quite challenging, 30 degrees Celsius all day, every day and near 100% humidity. It's much better than being cold, right? Air conditioning is rather important.
Singapore received a boost in recent times from an infusion of people and capital fleeing Hong Kong. There are 6 million inhabitants, of almost every ethnic group. It's spotless and full of well-tended green spaces. Very impressive!
Byron's beats
The US dollar index is at its highest level so far this year. The surge is due to the sticky inflation data we've been seeing. If the Fed delays dropping interest rates, US treasuries will continue to offer attractive returns for global investors, which in turn means more money flows into the US. That's buying Dollars.
The reason the market has been weak recently is also because of this idea that interest rates will be higher for longer. What's making your portfolio go down is also making the currency you are invested in go higher. I suppose that it softens the blow a little, especially if your lifestyle is funded by Rands.
These are just short-term trends which are fun to figure out. We expect US stocks and the US Dollar to grow in value over the long term, as that economy continues to outshine all the others.
Michael's musings
I just watched Netflix's (NASDAQ:NFLX) show 'Arnold', a three-part series following the life of Arnold Schwarzenegger. I enjoyed the show more than I thought I would.
Schwarzenegger has a very impressive CV. He was a multiple Mr Universe winner, then became Hollywood's top-earning actor and finally, a two-term governor of California, where he won his second term by a landslide. Any of those achievements alone is noteworthy.
His success can be attributed to his mindset and approach to life. Two of his sayings stuck out for me: "Early to bed, early to rise, work like hell, and advertise." and simply "Be useful." Imagine how different the world would be if everyone took the view of working hard and being useful. Maybe I should read his book now?
Bright's banter
France is cashing in big time, thanks to a shift in its leading exports. While agriculture used to dominate, it's now luxury goods, especially those from the powerhouse LVMH (EPA:LVMH).
Last year, LVMH's handbags, perfumes, jewellery, and watches, valued at around $25 billion, made up a whopping 4% of French exports, according to a study by Asteres.
In comparison, France's entire agricultural sector accounted for 3.2%. The reason? Well, it seems the rest of the world just isn't consuming enough wine and cheese, and those lovely LVMH handbags are very popular and very expensive.
Signing off
Asian markets are up again this morning as tech companies lead the charge. Benchmarks rose in India, Hong Kong, Japan, and South Korea, while mainland China continued with its slide down.
US equity futures are little changed so far. The Rand is trading at around R19.20 to the US Dollar.
Today is a big earnings day for two Vestact-held stocks, Visa (NYSE:V) and Tesla (NASDAQ:TSLA). Tesla especially so, thanks to all the recent noise, mostly negative. Other large caps out with numbers today include PepsiCo (NASDAQ:PEP), Novartis (SIX:NOVN), and UPS (NYSE:UPS).
Have a top day and try not to fall asleep before those exciting earnings releases hit the screens tonight. Or just leave it to us.
