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US markets hit fresh record highs last night after the Fed approved plans to slowly dial down its bond-buying stimulus program. The tech-heavy Nasdaq deserves special mention, because it rose for the eighth trading session in a row, its longest winning streak since 2020.
The US Fed finished its two-day meeting and announced plans to gradually taper its economic support measures over the forthcoming months. The market liked that outcome because while this is happening, interest rates will remain unchanged.
In company news, the eco-friendly wool slip-on sneaker maker Allbirds debuted on public markets and its shares rocketed higher by 90%. The company is now valued at $4.1 billion. Elsewhere, meme stonk Bed Bath & Beyond surged 15% after the company announced a partnership with grocery chain Kroger.
By the numbers, the JSE All-share was up 1.19%, the S&P 500 was up 0.65%, and our precious Nasdaq was up 1.04%.
Our 10c Worth
One Thing, From Paul
Tesla's share price has gone up a lot lately. It's gained 80% in the last six months. In fact, it's up 55% in just the last month!
At current levels, investors are a bit ambivalent about buying them, but keep in mind that Tesla may dominate the electric vehicle, battery and renewables industries in time to come. In many parts of the world internal combustion engines may soon be banned. By soon, I mean the end of the decade (by 2030).
Electric vehicle sales are rising fast, to about 6.4 million vehicles per year. However, that's only about 7% of global car sales. There's a lot of space to fill.
The chart below shows the market capitalisation of the global auto industry, since 2018. The traditional manufacturers are in dark green at the bottom. Battery makers are in light blue. Tesla is in light green, expanding fast. Ride-hailing companies like Uber are in grey.
Byron's Beats
Netflix has launched five mobile games for their subscribers this week. According to this Business Insider article the games are only available on Android platforms for now.
There are two Stranger Things games, a puzzle game called Card Blast, a Shooting Hoops game and a pinball type game called Teeter Up. As you can see, only two out of the five games are Netflix franchises, but this is just the start in my opinion.
I find it interesting that these games will be added to existing subscription packages at no extra cost. I suppose they are trying to make their overall product more appealing compared to the competition. If the games are a hit, the news will spread by word of mouth, and people who are not subscribed will sign up. It will also make existing subscribers more reliant on the app for their entertainment.
Netflix founder Reed Hastings once said that their biggest competition was sleep. Gaming is also right up there in the fight for people's spare time. This is the start of something very exciting for Netflix and their subscribers.
Michael's Musings
Warren Buffett's annual Berkshire Hathaway Chairman's letter is mandatory reading if you are employed in the investment world. Most people focus on Buffett and don't pay much attention to his long-standing business partner, Charlie Munger. To be honest, I find Munger's writings more interesting and insightful.
Munger fancies himself as a bit of a philosopher, and why not, he spends a significant amount of time reading and thinking. He has been involved in numerous successful businesses, making him a billionaire along the way.
Munger is at the centre of a current controversy about a new student residence at the University of California, Santa Barbara. He donated $200 million towards the project, which will be called Munger Hall. Having his name on the door is not the only string attached to the cheque though. He has requested a very unique design for the building: 94% of the student rooms won't have any windows.
An architect on the project quit, calling the plan "unsupportable from my perspective as an architect, a parent, and a human being". The design is supposed to motivate students to leave their rooms and spend more time socialising.
Maybe the building will be a complete failure. It will be an interesting experiment though, funded through private capital. When talking about his charitable giving, Munger said: "I've hugely enjoyed doing it through a long lifetime, and I don't regret a single dime". We should all aspire to be in a position to give a lot of money away, to causes that resonate with us.
You can read a more in-depth article here - Charlie Munger shrugs off controversy over $200 million donation for nearly windowless dorm.
Bright's Banter
Have you ever wondered how much the music streaming companies pay artists per stream? Well, this information was top secret until recently. Apple released a statement detailing how much it pays artists and publishers, forcing other music streaming companies to do the same.
According to the Apple document, the tech giant pays an average per-play rate of $0.01; meaning one stream equals a one-cent payout. This sounds pretty low, but I was surprised to find out that they are the top payer in the whole streaming industry.
The infographic below shows how many streams/plays are needed for the publisher to pay out $1.
You will find more infographics at Statista
Linkfest, Lap It Up
US wages are rising at the fastest rate in 20 years. Increased wages means more money available to consume in the economy, but it can also lead to higher inflation and lower profit margins. Time will tell which force will impact the economy the most - Raise Your Hand if You Got a Raise This Summer.
Spotify's push to build the best podcast platform is paying dividends. The streaming giant has surpassed Apple to become the top podcasting destination in the world's largest market - Spotify overtakes Apple as top US podcast platform.
Signing Off
Asian markets are hanging on to weekly gains in mainland China, Hong Kong, Japan, and South Korea. The less surprises from China, the better. In local news, MTN just announced some good results.
US futures are slightly higher in early trade, so let's hope that's still the case by later this afternoon. The Rand is trading at $15.31 to the US Dollar. We trust that you will enjoy this sparkling summer's day.
Sent to you by Team Vestact.