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Market Scorecard

Stocks on Wall Street had a bad start, but recovered after lunch to close at a small loss. Weak earnings reports from financial behemoths seemed to be the main concern early on. The S&P 500 recorded a fifth consecutive down day. The Nasdaq managed to squeak into the green.

In company news, JP Morgan's (NYSE:JPM) shares fell 3.5% after profits for the quarter sagged by 28% because the bank set aside $428 million to cover possible future loan losses. Elsewhere, Qualcomm (NASDAQ:QCOM) shares rose 4.2% after a bullish analyst call.

Yesterday the JSE All-share closed down 2.16%, the S&P 500 fell 0.30%, and the Nasdaq rose a slender 0.03%.

One Thing, From Paul

Ok, advice time! Here's a random one: be well-organised, and bring your own lunch from home, to work.

Don't eat junk from the vending machine, or get garbage food from the greasy take-out joint nearest to your office. Rather, make a little extra food at home the night before, and take the leftovers along in the morning, in a container. That way you can control the quantity that you eat, and have the stuff that you like.

I thought of raising this topic today, after spotting this fun picture on social media of Lebron James, who clearly agrees with me.

Byron's Beats

Central banks increase interest rates to try to dampen demand in the economy. Lower demand means companies can't raise prices, hence inflation is nullified. A side effect of lower demand is less economic activity. That is why everyone is talking about a potential recession in the US.

It's important to understand that a potential recession is not a reason to be selling shares right now. The market has already factored in the risk of a recession. The GDP pullback may be worse than the market expects, and shares could go down further, but the opposite could also be true.

All the complex financial models in the world can't tell you what will happen next. That is why we don't try to predict the unpredictable. It's far easier to pick companies that can survive periods of poor economic activity. The current Vestact model portfolio is full of world-class companies that can navigate through these complex times.

Michael's Musings

Here is a feel-good headline for a Friday: Canadian fintech chooses Cape Town for its global HQ. CostCertified is a hyper-growth Canadian startup which gives cost estimates for residential construction. The company's founder said:

"South Africa offers a high-calibre, untapped talent pool for international businesses. Between unemployed graduates and people who don't have any formal qualifications, but have all the relevant soft skills and potential, it's not difficult to build a strong and successful local team."

Cape Town has several advantages too. The residents speak English, it is located in a convenient time zone, our labour and property prices are cheap by global standards, and we have an international reputation for being hard-working.

CostCertified plans to hire at least 300 people over the next two years. Hopefully, we will see more international companies doing the same.

Bright's Banter

Amazon's (NASDAQ:AMZN) 2022 Prime Day, which ended Wednesday, was its biggest ever The e-commerce giant sold over 300 million items worldwide during this two-day discount extravaganza. The sale also helped boost traffic on competing sites of other retailers like Walmart (NYSE:WMT) and Target (NYSE:TGT), who held their own discount days

Prime Day shopping jumped 8.5% from last year to $11.9 billion with best-selling items being diapers, beauty products, and Apple watches. Consumers worldwide didn't seem deterred by price pressures, this uptick in sales was towards the higher end of expectations.

The average order size during the event was $55.26, up 16.8% from a year ago, across 21 306 households and 58 934 orders. Two-thirds of shoppers didn't look for bargains on other websites and did all their shopping on Amazon. Not bad for a fake holiday launched in 2015!

Signing Off

Asian markets are mixed this morning with Japan and South Korea in the green, while Hong Kong and mainland China are in the red.

China's second-quarter GDP growth slowed to a mere 0.4% from a year earlier, its most anaemic pace in a while, thanks to the Covid pandemic. However, consumption rallied in June as curbs eased. No further economic stimulus was announced and the government left borrowing costs as they were.

US equity futures are flat so far. The Rand is currently trading at around R17.16 against the greenback, which is not great.

Have a sunny weekend, looks like winter is taking a break on the highveld.

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