Market scorecard
US markets extended their slide yesterday. August has been dire so far, with the S&P 500 down 4.8% for the month. Tech stocks have been weighed down by the prospect of rising bond yields, so the Nasdaq is down 7.2% so far in August, but still up over 28% year-to-date.
Please note that economic news continues to be favourable. In recent weeks the Atlanta Fed raised its forecast for third quarter US GDP growth from 4.1% to 5.0% and now to 5.8%. Let's just be patient, because good news is good news, right?
In company developments, China Evergrande, their second largest property developer, has filed for Chapter 15 bankruptcy in New York. The biggest gainer in the S&P 500 was Moderna (NASDAQ:MRNA) (+7.4%) due to an upswing in Covid-19 cases. The worst performer was pharmacy group CVS which tumbled 8% after terminating a partnership with health insurer Blue Shield.
At the end of the day, the JSE All-share closed down 0.72%, the S&P 500 fell 0.77%, and the Nasdaq tanked by 1.17% lower.
One thing, from Paul
Are you on your neighbourhood WhatsApp group? I'm on the one in Upper Houghton, and I find the various interactions quite touching. Johannesburg's middle-class suburbs are very diverse these days, and almost everyone is supportive and friendly.
Sometimes things go a bit off the rails, and snippy comments are made, but others intervene to restore order.
Detroit-based artist and social activist Maceo Paisley suggests these three ways to be a better neighbour. (1) Try small talk. Get out onto the streets and interact with people. Find out what their home language is and what they do for a living. Ask about their kids. (2) Don't be transactional. Do things that help the whole neighbourhood, like garbage collection, don't just act in your own interest. (3) Learn the local history. Share pictures of the suburb as it was. Knowing the origins of street names and who lived in your neighbourhood is fun and uplifting.
Byron's beats
The biggest winner from increased competition is the consumer. It is also good for an economy because it gives choice and keeps prices in check, allowing consumers to have extra money to spend elsewhere.
Bloomberg recently reported that Takelot is introducing delivery within one hour for certain items in anticipation of Amazon's arrival in South Africa. The rapid delivery service will initially be offered in parts of Cape Town before expanding more widely.
The article also mentions that e-commerce only makes up 4% of South African retail but grew by 30% last year. I'm a very happy Takelot client but will be pleased to have an extra choice when Amazon arrives.
Michael's musings
About 18 months ago, Disney opened its Star Wars: Galactic Starcruiser hotel, offering an immersive two-night adventure. With recent cost-cutting measures introduced at Disney, the hotel is sadly set to be shut at the end of September, and the $250 million investment will be written down to zero.
Although most guests gave their stay good reviews, the issue seems to be the price, with an entry-level package costing $4 500 for two nights. Each experience was limited to 100 people at a time, surrounding guests with the Star Wars universe, and allowing them to influence the two-day storyline through their actions at different junctures. It sounds pretty cool.
These sorts of crazy projects happen when money is cheap. Now that the cost of capital has jumped higher, it is time to get back to reality, literally.
Bright's banter
Sneakers are a $75 billion a year market that's set to jump to $100 billion by 2028. The term sneakers refers to soft shoes for leisure or light sports, and excludes shoes used for intense athletic activity.
Back in the day, kicks were mainly for sport. They somehow stepped out of the gym and onto the streets, getting all cozy with hip-hop and pop culture.
Nike (NYSE:NKE) is the big dog here with an 18% slice of the sneaker pie. The Jordan and Converse brands are both under the Nike umbrella, showing just how dominant they are.
Brands like Adidas (ETR:ADSGN) and Converse launched signature lines, Stan Smith's and All Stars, respectively, in the 20th century, and that's when sneakers got their swagger. Even though they used to be a no-go in fancy places, sneakers hustled their way into offices, and even weddings.
The Nike share price has not performed well lately, but it would be a bad idea to bet against the King of kicks.
You will find more infographics at Statista
Signing off
Asian markets are on the back foot again, down for the sixth day in a row as Chinese economic problems escalate. The MSCI Asia-Pacific index has lost more than 3% so far this week. The CCP is doing what it can to stabilise the Yuan, but that's a fool's errand.
US equity futures are unchanged in early trade. Let's hope that the mood improves later. There will be results out today from Deere & Company, Palo Alto Networks (NASDAQ:PANW) and Estee Lauder (NYSE:EL).
The Rand is trading at around R19.02 to the US Dollar, which is no great shakes.
Get your work done early, then pack it in and go home after lunch. Have a great weekend.