Gold up 1% as oil prices take a breather ahead of consequential Fed rate decision
Market Scorecard
The US market closed in the green on Friday amid a very quiet trading day. Traders and money managers enjoyed the last bit of their summer vacations, resulting in thin volumes. The Dow and S&P500 held on to those all-time highs with weekly gains of 0.8% and 0.7%, respectively.
According to FactSet, the earnings season so far has resulted in 87% of S&P500 companies reporting analysts beating numbers, and as a result, investors remain optimistic.
In company news, Apple (NASDAQ:AAPL)'s next iPhone lineup will get at least three new major camera and video-recording features that should entice users to upgrade.
On Friday, the JSE All-share closed down 0.02%, the S&P 500 closed up 0.16%, and the Nasdaq closed up 0.04%.
One Thing, From Paul
Which companies will be the world's biggest in 2030? That's an important question for the team here at Vestact, because we need to make sure that our clients own those shares.
If you look back a decade or two, you can see that some big companies have fallen off the bus. General Electric (NYSE:GE), ExxonMobil and Nokia (HE:NOKIA) were at the top of the list twenty years ago, but they are not anymore.
One company that I think could be right up there in a decade is Illumina (NASDAQ:ILMN). At the moment, it's "only" worth $74 billion. That's just 3% of the market value of Apple.
My confidence in them is based on the fact that they are right at the centre of the burgeoning genetic medicine industry. They make the machines and consumables that are used to test genetic material. That includes Covid tests, blood tests, tumour samples and more.
Illumina had its second-quarter results out recently, and they looked good. Revenue was up 78% compared to the prior year period. For fiscal 2021, the company now expects year-over-year revenue growth in the range of 32% to 34%. Keep adding to this one!
Michael's Musings
Last week NASA announced that they are looking for four people to live in prototype martian housing for a year. The idea is to simulate what it would be like for the first people on Mars. This sounds like an exciting job, but I'm not sure if I could be stuck in a small house, with no windows and three strangers for a year.
The house itself is rather interesting. NASA has decided to construct it using a 3D printer because that is a likely option on Mars. The designers also took learnings from the international space station and submarines, about how to assist people to live for long periods in a confined space with others.
We are one step closer to becoming an interplanetary species. Before we start living on Mars we, of course, need to visit the planet first. Elon Musk has set a goal of 2026 to reach the red planet and NASA has a goal of 2030. Even if there are slight delays, it looks promising for a human to land on Mars in the next decade!
Bright's Banter
Disney (NYSE:DIS) reported its quarterly earnings, showing that the entertainment powerhouse swung to profits of $918 million compared to a loss of $4.72 billion in the same period last year. The shining star was the less than two-year-old streaming business Disney+.
Disney+ added 20 million new subscribers in the first half of the year, to bring the total subscriber number to 116 million as of July 3rd, basically doubling on a year-on-year basis. It took Netflix (NASDAQ:NFLX) between seven and ten years to reach these heights. The speed difference shows how sometimes it is better to be a second-mover in an industry. The first mover does all the heavy lifting to create the industry and to get consumers used to the product. All those that follow have a much easier time.
If you add up all of Disney's streaming services i.e. Hulu, ESPN+, and Disney+, the company has over 174 million paying subscribers in total, which contributed to the 57% increase in direct-to-consumer revenues. The infographic below shows the increase in Disney+ subscribers since launch.
Signing Off
Asian markets are mostly down this morning. Mainland Chinese shares are the exception as investors await key Chinese data to gauge how the delta variant strain impacts their economic recovery.
US futures are unchanged in early trade. The Rand is trading around R14.73 against the US Dollar.
