This bull ain't BS

  • Market Overview

Market scorecard

US markets closed in the green on Thursday after jobless claims jumped to their highest level since October 2021. This suggests that the labour market is starting to cool down, which helped fuel tech stocks. The S&P 500 entered a new bull market, ending its longest bear market since the 1940s, with chipmakers like Nvidia (NASDAQ: NVDA ) and AMD (NASDAQ: AMD ) among the biggest gainers.

In company news, electric-car maker Tesla (NASDAQ: TSLA ) jumped 4.6% on rumours it might build a new factory in Spain, posting its 10th straight session of gains. This is the company's longest winning streak since January 2021. Elsewhere, Carvana shares popped 56% after the online used car retailer said it expects its profit to jump in the second quarter. Lastly, GameStop (NYSE: GME ) plunged 18% after the video game retailer fired its CEO Matt Furlong and appointed Ryan Cohen as its new executive chair.

At the end of the day, the JSE All-share closed down 0.14%, the S&P 500 rose 0.62%, and the Nasdaq was 1.02% higher.

One thing, from Paul

It's early morning here in New York City, but I'm writing down a quick piece of life advice (it's Friday and you readers deserve it). Do some DIY maintenance at home.

I'm not saying you should embark on major building work, plumbing, wiring or waterproofing. Big jobs must be left to professionals who know what they are doing. I'm referring to minor tasks that can be accomplished satisfactorily by a thoughtful amateur, with normal tools.

By way of an example, I recently replaced a 3 metre electrical circuit from a distribution board, to an outside gas geyser that kept tripping. This was at our farm property in the Waterberg. It took some careful testing to isolate the problem. It wasn't the geyser or the trip switch, it was the cable, inside the conduit, that had a cut in it. The testing phase is pictured below.

Next came some deliberate planning to come up with a solution, followed by shopping for a replacement cable. I already had the basic tools that I needed for the job.

All this took me a few hours, on two successive weekends. I pulled in the new cable by attaching it to the end of the old one being yanked out. I connected it all up carefully, and now everything works perfectly. It was one of the most satisfying things I've done in years.

Byron's beats

Last week's US jobs number was a cracker. It showed that 339 000 new jobs were created in the month of May, versus expectations of 190 000. Not only did this figure blast past expectations, but the numbers for March and April were also revised higher. Despite all the hardships the US economy has faced over the last year, it still remains incredibly resilient.

Avoiding a recession during an increasing interest rate cycle is unprecedented. This amazing feat is looking more and more likely. The Fed funds rate of 5 to 5.25% is now higher than inflation which last came in at 4.93%. This is the first time this has happened since 2019 and indicates we are very close to the top of the hiking cycle.

The market has rallied hard so far this year. A stronger-than-expected US economy at the top of the interest rate cycle spells good times ahead. Of course there are always unknowns around the corner but I would say that the rally is justified.

Michael's musings

A (NASDAQ: BKNG ) sponsored post on Statista shows the value created for customers due to online travel agencies. The theory is that having easier access to information drives more competition between room providers and thus pushes down room prices. The numbers come from the following research report - The economic impact of online travel agencies in Europe.

The observation in the report rings true to what we see in other sectors. The more transparent the industry, the better for the consumer.

Have you tried to buy a bed recently? The industry intentionally makes it near impossible to compare beds sold at different retailers. Two retailers will both sell Sealy, but they use different mattress names. The inability to compare like for like allows the bed shops to charge higher prices. The same happens in the insurance industry with their complicated policies. A lack of clarity is good for business profits.

Bright's banter

Self-made women from Europe and the US have regained their prominence among the world's richest female billionaires. Rafaela Aponte-Diamant of Switzerland, the co-founder of shipping company MSC, tops the list with a net worth of over $28 billion.

Diane Hendricks of ABC Supply and Judy Love of Love's Travel Stops & Country Stores rank second and third, respectively. Even though Chinese self-made women faced challenges due to market turmoil, Wu Yajun of Longfor Properties (HK: 0960 ) maintained her position among the world's richest.

Notable Chinese self-made women in the biotechnology sector include Zhong Huijuan, Fan Daidi, and Zhao Yan. Wang Laichun remains among the top self-made women despite her peers in the electronics and mobile phone industries exiting the list.

Signing off

Asian markets are mostly higher this morning, pushing the MSCI Asia-Pacific index to its second weekly gains. Benchmarks rose in Hong Kong, Japan, mainland China, and South Korea. The optimism over potential economic stimulus in China boosted sentiment.

US equity futures edged lower in early trade. The Rand is sitting pretty at R18.89 to the US Dollar.

Good luck to those doing the Comrades this weekend, you are all legends!

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