Wall Street drops as AI worries pummel chipmakers
Market scorecard
US markets closed in the green yesterday in a shortened session ahead of today's 4th of July holiday. Labour market data showed that the services sector contracted at the fastest pace in four years. This reignited hopes for potential rate cuts as early as September. As a result, both the S&P 500 and the Nasdaq Composite hit new record highs.
In company news, Paramount Global (NASDAQ:PARA) surged 6.9% after news broke that the deal with Shari Redstone's National Amusements and Skydance, was back on. Meanwhile, Meta's (NASDAQ:META) Twitter clone, Threads, hit 175 million active users, and Mark Zuckerberg hinted at the possibility of introducing ads on the platform. Over at BMO, analysts believe Eli Lilly's (NYSE:LLY) newly approved Alzheimer's drug could bring in sales of up to $7.1 billion.
Here's the lowdown, the JSE All-share closed up 1.68%, the S&P 500 rose 0.51%, and the Nasdaq was 0.88% higher. Love it!
One thing, from Paul
You can now take driverless taxi rides in San Francisco with Waymo. The company, which is part of the Google (NASDAQ:GOOGL) group, has a fleet of self-driving white Jaguars.
This technology was developed in Phoenix, Arizona, and has been tweaked and improved for the last 15 years. Each car has a plethora of sensors and cameras onboard, and servo motors that control the vehicle. It's constantly connected to the internet, and to geolocation databases, for tracking and navigation purposes.
As a 58-year-old, I can still remember the world before computers and the internet. The fact that humans now trust a machine to drive them around on the open road is truly amazing to me.
I come from an era where saying "the system is offline" is a valid excuse. When I get to a sink in a bathroom at the airport, I expect the sensors over the taps to not work. I'll have to update my own programming!
I'm excited by these developments. As a shareholder in Google, Tesla (NASDAQ:TSLA), and Uber (NYSE:UBER), I'm looking forward to the evolution of the robotaxi industry.
Michael's musings
In 2022, NASA said that they plan to decommission the International Space Station in 2030. The oldest parts date from 1998, so it's had a good run. The station circles the Earth every 90 minutes at an altitude just above 400 km, and if it is left in orbit for too long, it will crash into Earth.
Last month, NASA announced that SpaceX submitted the winning bid for taking the ISS out of orbit and crashing it into the Pacific Ocean. Elon Musk's SpaceX will be paid $843 million to get the job done. Given the magnitude and importance of this task, SpaceX is the obvious choice. Boeing (NYSE:BA) recently showed us how difficult it is to manufacture a cost-effective spacecraft, something SpaceX mastered years ago.
I wonder why NASA didn't follow a different route, by strapping a big rocket to the ISS and blasting it into space? Surely that would be cheaper and more interesting? I suppose there might be a risk of it breaking up and spewing space junk all over the place.
Bright's banter
Jeff Bezos is set to sell nearly $5 billion worth of Amazon (NASDAQ:AMZN) shares in July, following a sale of $8.5 billion in February, bringing his total offload this year to over $13.4 billion. Those are big numbers, but his riches are well-deserved in my opinion.
Despite stepping down as CEO in 2021, Bezos remains Amazon's executive chair and its largest shareholder with about a 9% stake. Amazon's market value recently crossed the $2 trillion mark, driven by enthusiasm for AI's potential to boost its cloud division.
Founded by Bezos in 1994, Amazon evolved from a bookseller into a massive enterprise covering e-commerce, cloud computing, advertising, streaming media, and more.
Since stepping back, Bezos has focused on ventures like Blue Origin, the Washington Post, building giant houses, designing his mega yacht, and charitable efforts like funding the Day 1 Academies. Beautiful!
Signing off
Eastern markets are mostly in the green this morning with the MSCI Asia-Pacific reaching its highest level in over two years. Benchmarks rose in Hong Kong, India, Japan, South Korea, and Taiwan. Only mainland China continued its losing streak as the Yuan hit its lowest level against the US Dollar.
In local company news, Bidvest (JO:BVTJ) has agreed to acquire 100% of Citron Hygiene from Birch Hill Equity Partners for an undisclosed sum. Citron Hygiene is known for its washroom hygiene products and services across the US, Canada, and the UK. Elsewhere, Bidvest revealed plans to sell its bank, as the group isn't looking to invest additional capital to expand the lender.
US markets are shut today, for Independence Day celebrations. They will be open on Friday though, and the monthly jobs report will be out before the opening bell.
The Rand is currently at around R18.41 to the US Dollar.
It will be a quiet day for us in the office. Keep well.
