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Market Scorecard

US markets closed in the green last night after a strong rebound in the final hour of trading. At this point, sellers of stocks seem to have exhausted themselves. To be fair, we are all on tenterhooks as we await an interest rate announcement from the Fed tomorrow. The expectation is a 75 basis point hike, but 100 isn't off the table.

Germany is heading into recession as inflation is set to top the 10% mark, the Bundesbank said yesterday. Not to worry, life continues in that country, with the Octoberfest returning to Munich for this week and next.

In company news, vaccine-maker Moderna (NASDAQ:MRNA) tumbled 7.1%, making it the worst-performing stock in the S&P 500 for the day, after Joe Biden said in an interview that "Covid was over". Elsewhere, the top performer in the S&P 500 was corrugated packaging company WestRock, rising by 5.5% after a big sell-off last week.

In summary, the JSE All-share was down 0.16% yesterday, but the S&P 500 rose 0.69%, and the Nasdaq climbed 0.76%.

One Thing, From Paul

New census data shows that working from home in the US went from 5.7% in 2019 to 17.9% in 2021. The San Francisco bay area was 35%, and the New York area 23%, up from 7.2% and 4.8%, respectively in 2019.

I certainly noticed how much quieter New York city was, when I visited our service providers there in February and June 2022. One work day, I went for a run right down the middle of 5th Avenue alongside Central Park at 10h00 am and there was not a car to be seen. I felt a bit like Will Smith in the movie "I Am Legend".

This is a temporary setback, I'm sure. This is not the first time that New York has had to re-invent itself. In the 1960s it emptied out as manufacturing jobs went elsewhere. By 1980 it filled up with knowledge-based industries, such as finance and professional services. Industrial spaces and low-value office buildings were converted into residential loft apartments. I look forward to seeing what happens there next.

Byron's Beats

Did you know that Microsoft (NASDAQ:MSFT) used to own shares in Apple (NASDAQ:AAPL)? When Steve Jobs came back to Apple in 1997 to try and revive the company, he knew he had to work closely with Microsoft to keep Apple relevant. He needed Microsoft to build new versions of Office for the Mac.

Somehow Jobs managed to convince Bill Gates to buy $150 million worth of non-voting stock and make a 5 year commitment to provide Office for Mac. The share purchase gave Apple some extra cash during a precarious time for the company and ensured the two companies' interests were aligned.

The rest, as they say, is history. However, there is a twist in this tale. Microsoft sold the shares in 2003 for $550 million, a good return after six years. But if they had kept the shares they would be worth $120 billion today. Ouch.

Michael's Musings

People travelling between Namibia and Botswana will no longer require a passport. A valid identity document is all that will be needed. It's great to see countries embracing cooperation with their neighbours, dumping the restrictions from the Covid period.

Imagine if South Africa implemented something similar with our neighbours. Unfortunately, due to terrible economic mismanagement here, our unemployment rate is sky high and xenophobia is starting to smoulder again.

There is a small list of countries where South Africans enjoy visa-free travel, which includes a number of SADC nations, some former British colonies, Turkey, Thailand and many countries in South America. Travel to West, East and North Africa is not easy, requiring visas. It would be good to see more cooperation between African nations to help spur economic growth. We should take the lead.

Bright's Banter

I wrote recently about Instacart filing to go public, but the plan isn't to raise much capital, rather to sell employees' shares. This means the grocery delivery startup will not issue any new shares in the IPO, but instead allow staff, including some of its earlier hires, to cash out some of the shares they have been accumulating.

This move could help Instacart retain talent by giving workers more ways to benefit from their shares which have been illiquid since its founding in 2012. The listing will also attract new prospects who would rather work for an established company, instead of a startup.

The San Francisco-based grocery delivery startup raised more than $265 million in March 2021 to become the biggest grocery delivery company, counting Kroger and Walmart as customers. For the quarter ending in June, the business turned a profit and saw revenue grow 39% from a year earlier.

Instacart was founded by entrepreneur Apoorva Mehta, a former Amazon employee, with help from Max Mullen and Brandon Leonardo. It wasn't until the pandemic that Instacart suddenly became a lifeline for millions of North American consumers. Five years of growth packed into one year helped it increase sales by 330% in 2020.

The grocery delivery game was so lucrative in 2020 that other food delivery companies like Postmates and DoorDash saw this opportunity and pounced on it. Uber acquired Postmates, and DoorDash is listed separately. Adding Instacart to listed markets will help investors understand this sector better.

Signing Off

Asian markets are up for the first time in six trading days. Japan, mainland China, and South Korea jumped higher. Hong Kong stocks rose on news that the city plans to relax Covid restrictions for all travellers. Finally!

US equity futures are edging higher in early trade. The Rand is still on the floor, trading at R17.70 to the US Dollar.

The first spring rains are predicted for Johannesburg tonight. What a relief, there's a lot of dust and pollen in the air. Enjoy!

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