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The world in union

Published 2023/09/08, 12:04
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Market scorecard

US markets went down again last night, for a third day in a row. Tech shares have been weak, with top dog Apple (NASDAQ:AAPL) down another 2.9% (more on that from Michael, below). Nvidia (NASDAQ:NVDA) has also battled and dropped by 1.7% last night. The US utilities sector rose 1.3% but has been having a really bad year, down over 16% so far.

In company news, the top performer in the S&P 500 was health insurer Centene Corp. (NYSE:CNC) (+4.9%) after talk of an accelerated buy-back programme. Disney (NYSE:DIS) continued to sink as it contended with numerous issues, from the writers' strike to a squabble with Charter about sports viewing rights.

In summary, the JSE All-share closed down 1.65%, the S&P 500 fell 0.32%, and the Nasdaq was 0.89% lower.

Byron's beats

Buying a diversified portfolio is just like a managing a sports team. Some of the players will have great games while others will have dips in form. But as long as they are quality, you know they will bounce back in time.

The coach and the stock picker face the same challenges. There will be times when player confidence is high, followed by a bad patch. The slumps can be hard, but you just have to trust that their good attitude, strong work ethic and deep talent will carry them through.

Currently, stocks like Nike (NYSE:NKE), Johnson & Johnson (NYSE:JNJ), Starbucks (NASDAQ:SBUX) and Amgen (NASDAQ:AMGN) are lacking a bit of form, but we are confident they will recover. If you look at their performance over the last decade, you know they are world-class. Luckily Nvidia (NASDAQ:NVDA), Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) have carried the team lately.

In this analogy, we consider one game for an athlete is the equivalent of 6 months for a listed company. You need to give a quality player at least 4 matches (2 years for the company) to regain their form.

Speaking of team sports, good luck to the mighty Bokke this weekend. Make us proud.

One thing, from Paul

Friday advice time again. Today I'm just re-posting something from Seth Godin that I liked a lot. It has the title: Are you doing what you said you wanted to do?.

Here are the highlights (my selection):

If you want to be a poet, write poetry. Every day. Show us your work.

If you want to help animals, don't wait for vet school. Volunteer at an animal shelter right now.

If you want to do marketing, find a good cause and spread the idea.

I concur, just get started. As you know, it's easier to ask for forgiveness than to ask for permission.

Michael's musings

Apple is down 6% over the last two trading days on news that China is banning the use of iPhones at government agencies. There's a worry that the ban could be extended to all government-controlled corporations. This is a tit-for-tat move, because the US government bans its employees from using TikTok at work, and all Huawei devices. The concerns relate to spying on each other's officials.

Apple doesn't break out iPhone sales per region, but it is estimated that China is currently Apple's biggest iPhone market, or a very close second to the US. Of course, government officials make up a very small percentage of the total Chinese population, so these fears may be overdone.

We have lived through a few scares about Apple's position in China. They are a key employer in that country, so it's unlikely that the government will be too hostile. On a recent visit to China, Tim Cook was singing the praises of that nation, highlighting Apple's good relationships with everybody.

The iPhone isn't as central to Apple's business as it was five years ago. The highly profitable services business is showing strong growth and becoming more important to group prospects.

We will keep a close eye on these developments, and report back to you if we feel that there is any lasting concern for Apple.

Bright's banter

Novo Nordisk (CSE:NOVOb), the Danish pharmaceutical company known for its weight loss drugs Ozempic and Wegovy, has been on a roll lately. Despite being almost a century old, their rapid rise is a function of the development of semaglutide in 2012 to combat type-2 diabetes.

Their market capitalisation recently crossed the impressive $400 billion mark, even surpassing Denmark's entire annual GDP. This remarkable achievement is on the back of a 30% increase in sales and a 43% rise in net profit. Due to huge demand for their popular medications, prices are increasing and they raised their 2023 outlook.

Novo Nordisk is now the second most valuable public company in Europe, just behind luxury fashion giant LVMH (EPA:LVMH). It's market cap is more than McDonald's (NYSE:MCD) and Netflix (NASDAQ:NFLX) combined.

The Danish government has started publishing economic statistics that exclude the "Novo effect". Denmark is a nation with fewer than 6 million people and has another iconic company, Lego, which is privately held.

Signing off

Asian markets are not smelling too fresh this morning. Equity indices dropped in Japan, mainland China and South Korea. The market in Hong Kong was shut down again due to yet another bout of disgusting weather. Flash floods submerged their metro stations and trapped drivers on roads.

US equity futures are up a bit in early trade. The Rand is trading at around R19.14 to the greenback.

It's weekend again, and the start of the Rugby World Cup. Are you wearing your green and gold today? We are the defending champions and full of hope. Amandla!

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