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Market Scorecard
It's springtime in Joburg and the jasmine climbers are in full and fragrant bloom. Happily, US markets moved higher yesterday, breaking a multi-day losing streak. Somewhere there was a desk trader who was told to sell bonds and buy stocks. Oil prices climbed for a second day after Saudi Arabia and some of its OPEC+ allies suggested a cut to output. That seems unfortunate? We are oil consumers, not oil investors.
A few companies are still reporting second quarter earnings and here are their after-hours moves. Customer management software giant Salesforce fell 7%, cloud data platform provider Snowflake jumped 17% and chipmaker Nvidia was down 4%. We'll discuss Nvidia's results in more detail tomorrow because it's a Vestact-recommended stock, held in many of your portfolios.
Izolo, the JSE All-share was up 0.05%, the S&P 500 rose 0.29%, and the Nasdaq gained 0.41%.
Our 10c Worth
One Thing, From Paul
One of my favourite Vestact clients is 94 years old and is still keenly interested in markets. He follows the fortunes of the companies in his portfolio closely. I'm in regular contact with him, and he's a delight to talk to.
In a similar vein, I enjoyed this New York Times magazine article about the life and work of Manhattan-based artist Alex Katz. Katz (pictured below) is 95 years old and about to have a retrospective show of his paintings at the Solomon R. Guggenheim Museum in New York.
The interviewer describes how Katz has lived, "almost single-mindedly dedicated to art, to his practice, to the craft of painting, and what lessons that might impart in our age of scatteredness and distraction: about devotion, discipline, the investment of time it takes not only to make art but to do anything worthwhile".
At the end of the interview, when Katz is asked about his legacy and what he thinks about the future, he chuckles and says "I try not to. I try to stay alive today".
Byron's Beats
I've been looking at online advertising this week, and see that Microsoft is also getting in on the act. And no, I am not talking about ads on Bing, their failed search engine. They've started putting adverts in the Outlook mobile app for free users. The ads pop into your inbox and look very similar to regular emails. Sneaky. If you do not want to see the ads, you need to pay for the service, which sounds fair.
I remember a time when Facebook and Google were called monopolies. That couldn't be further from the truth. If you are a digital business and you want to advertise your product online, you have plenty of options. Not to mention old-fashioned television and print media.
Michael's Musings
What is the secret ingredient of a successful start-up and what will the founder CEO need to bring to the project? Mosaic Ventures, a European-based venture capital firm, analysed the characteristics of 197 founding CEOs of European unicorns to uncover patterns in their backgrounds and previous experience.
Contrary to the theme in some movies, only around 10% of the founders skipped college (university) or dropped out. More than half actually had a master's degree or higher. Interestingly, attending a big-name university didn't seem to matter much in the European context.
The most telling insight is that experience really matters. Most founders worked at C-suite level before going out on their own; 65% were repeat founders; and 35% had more than 10 years of work experience before starting their own company.
Read more - What do Europe's leading founders have in common?
Bright's Banter
Zoom was the go-to video conferencing app during the pandemic, and enjoyed outsized growth. Although "to Zoom" is now a verb, and their software is fully integrated into corporate life, they are finding it very tough to maintain that pace of expansion.
Zoom's latest numbers showed that revenue growth has slowed to just 8%, as it tries to fend off competition from Microsoft Teams. Markets didn't like the fact that management lowered their full-year revenue guidance, resulting in a further share price drop. Their share price has lost 55% in the year-to-date and over 70% for the last 12 months.
Zoom and Microsoft teams give employees the flexibility and freedom to work from anywhere. We've seen a lot of businesses adopt the hybrid model of working from anywhere for two days and then spending the remainder of productive hours in the office. As more companies encourage workers to return to the office, the usage of online meetings will decline.
The infographic below shows Zoom's quarterly growth in revenues since the 2021 fiscal year.
You will find more infographics at Statista
Linkfest, Lap It Up
Nedbank is an amalgamation of many different institutions, some established as early as the mid-1800s. Here's the history of our banking industry - Exploring the oldest financial institutions in South Africa.
The Settlers of Catan is a best-selling board game. An augmented reality version is coming in 2023, thanks to developer Tilt Five AR - The Settlers of Catan will become a holographic game.
Signing Off
Asian markets are higher this morning amid further steps by the Chinese authorities to spice up their ailing economy. Trading in Hong Kong was scrapped soon after lunch due to a storm. Elsewhere, South Korea's central bank raised borrowing costs and projected faster inflation. The Won and bond yields edged higher.
US equity futures are also looking good in early trade. The Rand is trading at R16.86 to the greenback.
Looks like a good day is in store. Don't waste it.
Sent to you by Team Vestact.