Explainer-How can Trump ’cut off all trade’ with Spain?
Market Scorecard
US markets rallied yesterday, staging a lovely rebound after a series of down days. Even though the pace of growth in the global economy has slowed, we are transitioning as expected, from the early recovery stage to the mid-expansion phase. The S&P 500 is only 1.2% below the all-time highs we saw back in early September.
In company news, specialty lender GreenSky (NASDAQ:GSKY) saw its shares surge 53.15% after investment bank Goldman Sachs (NYSE:GS) announced that they will be acquiring the business for $2.2 billion. I guess that Goldman is moving more into main street banking.
At the closing bell, the JSE All-share was up 0.13%, the S&P 500 was up 0.85%, and the Nasdaq was up 0.82%.
One Thing, From Paul
Why do so many people have cash stashed in bank accounts, earning nothing? According to Ben Carlson, there is now nearly $10 trillion being held in zero-interest savings accounts in the US. I wonder what the number is here in South Africa? If you have that info, let me know.
Why are people in love with cash, despite the poor returns? Inertia is a big reason. Once you have an online banking profile with all your beneficiaries loaded, you need to have a "slush fund" to draw from when the bills flood in, right?
Some people simply don't have the stomach for the stock market and/or other risky assets. As Carlson says "many people are more concerned with the return of capital than the return on capital".
That's fine and well, but in my view, you simply must get most of your savings invested in growth assets. Sure, there will be some market volatility, but no pain means no gain!
Byron's Beats
Here's a good news story to make your week. The Rob and Melani Walton Foundation has pledged $100 million to African Parks. The Waltons are part-heirs to the Walmart (NYSE:WMT) fortune and worth over $60 billion. Even so, that gift is a lot of money.
African Parks are an amazing non-profit conservation organisation that partners with governments to protect really large tracts of land. Today they manage 19 parks in 11 countries, making up 14.7 million hectares.
The areas they manage are the source of most of Africa's land water and jungles which in turn produce the air we breathe. That's quite important, right?
This demonstrates how individual wealth can make a positive difference. Whether you are worth $60 billion like the Waltons or just have enough money to feel comfortable, contributing some of your savings to vital causes is hugely gratifying.
Bright's Banter
An Australia-based startup called SunDrive has made a material breakthrough that will increase the efficiency of solar panels, and lower their cost.
SunDrive was founded in 2015 by Vince Allen and David Hu in a garage that they shared with some flatmates in Sydney. Allen, a Phd candidate at the time, built his own equipment and played around with different materials until he found that replacing the expensive silver in solar panels with copper yielded better results. That's how SunDrive was born.
The next big challenge for this start-up is to see whether they can produce their panels at mass scale. They'll be competing with some of the world's largest solar companies, including those in China.
The company has raised around $7.5 million to date but hopefully they can attract big names in venture capital. They've already got the attention of former Suntech Power CEO She Zhengrong, who is known as the "Sun King". I'd like to see these guys succeed.
Signing Off
Asian markets are down again after Beijing's latest push to rein in casino operators hurt sentiment. Mainland China, Japan, South Korea and Hong Kong markets are all down. When is it going to stop, I wonder?
US equity futures are very slightly lower in early trade. The Rand has weakened a touch and is back at R14.43 to the US dollar. It's a fresh day in Joburg. We hope it's great where you are too.
