Shell out

Market scorecard

US markets opened in the green yesterday, stayed that way for about 10 minutes, and then headed lower. Data showed that producer price inflation (PPI) was higher than expected and that jobless claims were lower than forecast. Elsewhere, Jerome Powell made a speech, signaling that there's no need for aggressive cutting, because the US economy is holding up. Now the "smart" traders expect the Fed to slow interest rate cuts.

In company news, Disney (NYSE:DIS) jumped 6% on strong results, it was up 12% at some point during the day. They reported good subscriber gains in Disney+ and forecast double-digit profit growth for 2026 and 2027. Elsewhere, Hims & Hers (NYSE:HIMS), a telehealth company that also flogs counterfeit drugs, fell 24.4% on news that Amazon (NASDAQ:AMZN) is expanding their online health offering.

In summary, the JSE All-share edged up 0.04%, but the S&P 500 dropped by 0.60%, and the Nasdaq fell by 0.64%.

One thing, from Paul

Friday advice: be good at operating digital technologies. In other words, develop yourself to be highly skilled when using mobile phones, laptops, iPads and all other web-connected devices and platforms.

Douglas Adams, the writer of The Hitchhiker's Guide to the Galaxy, noted that for people over 60, new tech is threatening because it's "against the natural order of things". They become change-resistant and suspicious of new-fangled devices.

Thanks to AI and better user interfaces, people under the age of 20 will probably never learn how to use computers either. Why bother to code, programme devices, or wrangle spreadsheets, when you could just submit a verbal prompt to an AI agent instead?

If you were born between 1970 and the year 2010 and are reading this, you should be an IT expert. Everyone older and younger has no idea what they're doing.

Byron's beats

Nvidia (NASDAQ:NVDA) is starting to create specialised service segments for their different GPU buyers. For example, they now have a division called consumer fintechs which supports their financial services clients.

According to the division head, Pahal Patangia, credit card fraud is expected to cost consumers $43 billion around the world in 2026. His team at Nvidia has created an AI workflow which helps financial institutions increase accuracy for fraud detection. You will be happy to know that system runs on Amazon's AWS, another Vestact stock.

Michael's musings

In 2021, a Dutch court ruled that Shell (LON:RDSa) needed to reduce emissions by 45% before 2030. The argument was that Shell had a duty to accelerate emissions reduction to protect people in the Netherlands and globally.

The ruling dented the Netherlands' reputation for supporting its businesses, and caused Shell to relocate its headquarters to London. Note: Shell said publicly that the ruling had nothing to do with the move, but I'm not convinced.

On Tuesday, the Court of Appeal in The Hague rejected the original argument, saying that Shell did have an obligation toward citizens to reduce CO2 emissions but that the responsibility lay more with government. "It is primarily up to the government to ensure the protection of human rights," the court said in a news release.

Shell's main argument was that if they stopped selling oil, then someone else would fill the gap, and the amount of CO2 produced globally wouldn't go down. It makes sense for companies to reduce emissions by using resources more efficiently. It doesn't make sense to tell oil or coal companies to stop producing their products. The only way that the consumption of dirty fuels stops is if consumers have viable alternatives.

Bright's banter

Klarna, the Swedish Buy-Now-Pay-Later (BNPL) giant, has filed for a US IPO, making it the largest Swedish company to list in the US since Spotify (NYSE:SPOT) in 2018. Although the number of shares and price range remains undisclosed, the listing is anticipated to be one of Europe's largest in 2025, second only to Revolut, valued at $45 billion.

Founded in 2005 by CEO Sebastian Siemiatkowski, Klarna's valuation surged from $5.5 billion to $46.5 billion during 2020 to 2021 but later fell to $6.7 billion in a 2022 funding round. The company is eyeing a valuation of around $20 billion for its public market debut, which may result in losses for some early investors.

Klarna's financials have improved, reporting a first-half adjusted profit of $61.7 million and a 27% increase in revenue, driven by a 38% jump in US revenue. The turnaround was supported by cost-cutting measures and leveraging AI in customer service. The BNPL industry has its critics, but this company seems set to endure.

Signing off

Asian stocks are having a good morning. The MSCI Asia Pacific Index rose 0.4%, its first gain this week, following data that showed China's retail sales expanded at the strongest pace in eight months and property prices fell at a slower pace.

In local company news, MTN (JO:MTNJ) released a quarterly update saying currency movements really hurt them. Revenue was down 18.5%, but up 12.9% in constant currency. The future of the business, Mobile Money (MoMo), showed good growth with monthly active users increasing by 5.7%, and Fintech transaction volumes increasing by 17.4%.

Looking at local share prices, Discovery (JO:DSBPp) and Dis-Chem (JO:DCPJ) are at 12-month highs; Sasol (JO:SOLJ), unfortunately, is at a 12-month low.

The Dollar has been surging over the past week, and now trades at $/R 18.23. It was over $/R18.30 earlier this morning.

Next (LON:NXT) week is another big one, with Nvidia results out on Wednesday night and the South African MPC hopefully announcing another rate cut on Thursday.

Good luck to those taking on the Virgin Active Ride Joburg 94.7 cycle race on Sunday.

Have a good weekend.

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