Xi pushes China’s open-source AI vision at BRICS summit
Market Scorecard
Byron was lamenting yesterday that the market opening in the green, and then falling away through the day, has been happening far too often. At 16:30 when the US market opens, things look okay. Then when you check again after supper, hmmm. By the time you go to bed, it has dropped further and sleeping is a good way to avoid watching all the red. It's not that bad actually. The 1.3% that the S&P 500 dropped yesterday is a far cry from the 7% drops we saw in March 2020.
Seeing moves of around 1% is fairly common. The volatility is frustrating though. At noon New York time, the market was up 0.5%. Then four hours later it closes down over 1%. Hey, if investing in stocks was easy, then everyone would be doing it.
Yesterday the JSE All-share closed down 0.85%, the S&P 500 closed down 1.34%, and the Nasdaq 100 closed down 2.11%.
One Thing, From Paul
We have endured a few rough days on the market recently. At this point, the gains for the S&P 500 for 2021 (year to date) have been erased.
Is a correction like this unusual? Not at all! You should expect, on average, three 5% corrections a year. You should also expect, on average, one 10% correction every year. This is how the stock market works.
The reason most widely mentioned for the sell-off is the rising US Government bond yields. I'm ignoring those headlines, to be honest, because bonds are boring. The Fed has been pretty clear about not raising interest rates, which is more important. Jerome Powell reiterated the Fed's position again last night.
I'm confident that US GDP will be up by about 7% this year as the Covid vaccines are rolled out widely (they really seem to be working well). So, I'd say that the recent market sell off is a buying opportunity.
Byron's Beats
I am glad to see this story gaining some traction in the South African media. South African-born billionaires outperform Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT). We knew about this a while ago because an existing client knows the founders and actually owns some Monster shares. Lucky him.
As the article suggests, Rodney Sacks and Hilton Schlosberg were both born in South Africa and went to Wits. After moving to the US they bought into a listed shell called Hansen Natural Corporation. In 2002 they launched Monster Energy which has lead the company to huge successes.
Since 1995 the company has returned 295 805%. Just incredible. Looking at the share price graph it was a very bumpy ride! Well done to Sacks and Schlosberg, we are proud of you. Successful South African business people around the globe should be celebrated.
Michael's Musings
After a long week, I try to find something light for my Friday Musings. Thanks to Statista, through the property company Knight Frank, we have the data on how much space $1 million will buy you in different cities. As a side note, Knight Frank is well worth a follow on Instagram.
It is no surprise that Monaco is the most expensive. The place is tiny and has millionaires fighting for space to take advantage of very favourable residency tax rates. I wonder how much longer Hong Kong will hold that number two spot? I get the feeling that with Mainland China's influence growing, the island's attractiveness will wane.
Lastly, even though Cape Town property is expensive by South African standards, it is cheap for a global city. I suppose this ties into what Paul says below in Blunders. Sometimes there is more freedom and value to living in a country without an overpowering government.
Signing Off
It is the first Friday of the month which means it is 'Jobs Day' in the US. At 15:30 we will find out if the US unemployment rate has held steady at 6.3%. More jobs mean more people consuming and a more robust (global) economy. Asian markets are in the red again this morning. Last night the US Dollar took another leap forward against global currencies, the Rand is now trading at $/R15.30.
