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Market Scorecard

Yesterday, US markets went sideways in a rather slow day of trading. Company earnings have been resilient and there are signs that inflation is easing, so stocks have been rising in recent weeks. The S&P 500 is 13% higher from its mid-June lows, and the Nasdaq has climbed 23% in the same period.

In company news, Coinbase (NASDAQ: COIN ) shares improved by 10% after the cryptocurrency exchange announced a partnership with money manager BlackRock (NYSE: BLK ). Elsewhere, Alibaba (NYSE: BABA ) rose 1.8% after the Chinese e-commerce giant posted good results. Finally, DoorDash (NYSE: DASH ) shares soared as much as 24% in extended trading as the food delivery company reported revenue that beat expectations thanks to a record number of orders.

In short, the JSE All-share closed up 0.16%, the S&P 500 was down 0.08%, and the Nasdaq rose 0.41%.

One Thing, From Paul

Friday, advice time again. This week, a comment about office life. If at all possible, work with nice people.

I read that the average corporate worker spends about 1,700 hours at their job annually, so having a good time there is really important. You might think that people in "purpose industries" (like education or healthcare) would always be fulfilled, and people in "functional industries" (like finance and engineering) wouldn't be. But research shows that this is not the case.

In fact, liking the people you work with is much more important. It's great to feel that you are part of a world-class team.

Good relationships with co-workers is the leading driver of meaning and fulfilment at work. If those around you are toxic, you must make a move. Conversely, time spent getting closer to good souls in the office is well-spent.

Byron's Beats

Last week I looked at numbers coming through from the big cloud computing businesses. Now let's take a look at online advertising.

Social media platforms are having a tough time. Meta, Snap, and Twitter all reported advertising sales that disappointed expectations. A lot of that had to do with Apple (NASDAQ: AAPL ) changing their iOS privacy settings. If Instagram cannot access your location, age, preferences, and other app usage stats, their value add to advertisers drops tremendously. We have heard firsthand how Instagram's effectiveness dropped immediately after the privacy changes came into play.

Amazon (NASDAQ: AMZN ) gets paid to run ads next to product searches, and that business had a great quarter. Their advertising revenue grew by 18% to $8.76 billion. From a business that is still quite new, Amazon advertising now accounts for 14.6% of US digital ads according to CNBC. That is amazing. Amazon is not reliant on information from Apple which is a big advantage.

Google (NASDAQ: GOOGL ) also had a good period, growing advertising by 12%. Their search-linked ads are not affected by Apple's iPhone settings either, although their YouTube ads business was impacted.

I believe Amazon's advertising business still has a lot of potential. People are on their site to shop; they are in the zone and ready to buy with 1 click.

Bright's Banter

PayPal (NASDAQ: PYPL ) surged over 10% on Wednesday after the company beat the street's expectations. The San Jose, California-based payments giant saw revenue grow 9% to $6.8 billion and narrowed its losses to $341 million thanks to a 13% increase in payment volumes.

Management expects cost savings of $900 million in 2022 and a further $1.3 billion in 2023 which will push the company back to profitability. Keep in mind that PayPal has over 400 million active users. They also announced a meaty $15 billion share buyback programme.

The newly appointed CFO Blake Jorgensen was previously at Electronic Arts (NASDAQ: EA ), Levi Strauss, and Yahoo! Inc (NASDAQ: AABA ). He'll focus on the promising Braintree payment-processing business, digital wallets, PayPal's online checkout function, and the fast-growing peer-to-peer payments system.

The online payments sector has been very competitive, thanks to lots of venture capital backed start-ups, but quite a few of those have folded recently. According to CB Insights, about 422 start-ups had crashed in 2022 by July. PayPal has a cash positive businesses with real scale.

Despite its horrible share price performance in 2022, we think that PayPal will bounce back. The outlook for 2023 is positive, with a leaner business and strong cash flows. Don't lose hope on your PayPal shares just yet.

Signing Off

Markets in Asia are up this morning, helped by gains in technology shares. Even the Taiwanese bourse has recouped recent losses.

The US employment report for July will be released later this afternoon. Economists expect the Labour Department to report 258 000 jobs added.

US equity futures are also mildly higher in early trade. The Rand is trading at R16.60 to the US Dollar.

Enjoy the weekend and good luck to the mighty Bokke!

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