Iran says Hormuz reopening depends on U.S. meeting its conditions
Market Scorecard
Yesterday, the JSE All-share followed global markets lower. For the US market, which only opens at 15:30 our time, it was more of a mixed bag. Their market whipsawed up and down the whole day and at the closing bell the S&P500 was lower but the Nasdaq was higher. Can we say that markets are getting into a holding pattern until after the election next week? Maybe. Last night, Microsoft (NASDAQ:MSFT) reported numbers which beat expectations both on the top-line and bottom-line. After a first look at the numbers, Goldman Sachs (NYSE:GS) has revised their price target higher and now expect the stock to rise 20% over the next year. We will have more on these numbers tomorrow.
Yesterday the JSE All-share closed down 1.48%, the S&P 500 closed down 0.30%, and the Nasdaq closed up 0.64%.
One Thing, From Paul
Here's a good read for you, on the New York Magazine website. It's by Josh Barro and it's about Jay Powell, head of the US Federal Reserve. This has been a big year for the Fed, which moved fast to counteract the possible disruption of financial markets in the dark days of April and May when markets went into a downwards Covid-19 spiral.
Here's an excerpt: "In March, as panic over the coronavirus caused stock prices to crash and made banks and bondholders skittish about lending, the Fed acted to support the economy by flooding it with extra cash it hoped would help keep normal what could be kept normal. It cut interest rates from 1.5 percent to zero, announced it would purchase $700 billion in Treasury bonds and other assets to push down long-term interest rates, and provided liquidity to keep corporations able to borrow and banks able to lend."
Byron's Beats
Tel Aviv is a very innovative city. Probably second only to San Francisco when it comes to tech start ups. A few years ago Visa (NYSE:V) set up an innovation centre in the city in order to gain some traction in the Tel Aviv fintech space.
This article from The Times of Israel talks about four new startups that will be joining the innovation centre this year. I really like the sound of GOGO Getter.
Some of these will fail, some will do well. Very rarely will they become big enough to move the needle. But it keeps Visa on top of a very fast moving sector. It, more importantly, gives these startups access to Visa's amazing client and merchant networks.
There is so much innovation going on behind the scenes, especially in the payments space. It is good to see Visa at the forefront.
Michael's Musings
Energy has been a big talking point recently. As the world becomes more mechanised and connected, we require more energy to keep things going. A big problem for many products is that they require batteries to function, either requiring recharging or a replacement.
Imagine the possibilities of having a battery that could recharge itself. Scientists have now taken a self-charging battery from being a theory to something that works in testing. It uses graphene's reaction when exposed to air to generate energy.
Considering that graphene is only 1 atom in height, the energy generated is tiny. The scientists have partnered with microchip manufacturers, who are able to put billions of transistors onto one chip, to try and put millions of these micro-batteries onto chips. These chips won't generate much power, maybe enough for a blue tooth connection, but it shows where the technology is heading.
Imagine having a small and very basic health tracker device, measuring things like your activity levels and heart rate. Taking this one step further, a chip could be implanted under your skin for permanent health tracking?
Bright's Banter
Shopify (NYSE:SHOP) announced that it will be partnering with TikTok to help its million-plus merchants advertise their products with ease on the video-sharing app. Shopify shares popped over 4% on the news due to TikTok having over 50 million daily active users and surpassed 100 million monthly active users in the US alone.
The partnership will allow merchants to sell products in the form of shoppable video ads, meaning as a TikTok user you will be able to click on an ad to buy the product you see. The transactions will go via the Shopify site, which will help drive its online sales and continue to tinker with new e-commerce features in the interim.
These social media businesses are getting very creative in order to find new advertising business and to keep their current clients. We've seen how businesses like Facebook (NASDAQ:FB) and Google (NASDAQ:GOOGL) have tinkered around with their advertising tools to help their customers reach a broader audience; something traditional media couldn't do.
Signing Off
This afternoon Tito Mboweni will present his Medium Term Budget Policy Statement (MTBPS) to parliament and the nation. We will get to see how bad our finances look, what the plan is going forward and maybe a few hints at where taxes will be in the future. US earnings continue to roll in today with Visa (NYSE:V), Mastercard (NYSE:MA) and Amgen (NASDAQ:AMGN). For the card companies, Mastercard reports before the US market opens and Visa reports after. Asian markets are mostly higher this morning and the Rand has given up a bit of ground, now trading at $/R 16.20.
