The week that was: An Apple a day keeps the markets at bay, Netflix, Tesla and Shoprite 

It was always going to be a rollercoaster week in the financial markets given the volatility we witnessed on Monday, the largest single-day stock market reversal and the only day the Dow Jones has given up 1,000 points to finish in the green. The technology-focused Nasdaq dropped almost 5% lower before ending slightly up. The week’s volatility continued with wild swings during most trading sessions as inflationary pressures, coupled with policy decision-making, were the primary concerns among investors. Sentiment has reversed and investors are fleeing speculative growth stocks for more safe-haven, defensive assets. Apple’s results after the bell last night could be an inflexion point for the market, as the largest business in the world (by market capitalisation) produced great numbers. An earnings miss and Mr Market would’ve almost certainly thrown a temper tantrum of epic proportions.

Apple’s earnings tell us a bit about the current environment. Despite macroeconomic concerns, many of which are justified by the economic data coming out, are unlikely to destabilise the economy. Businesses are still performing exceptionally well, underscored by solid results. Given the U-turn in sentiment, any bad news – outlined by Netflix’s forecasted subscriber growth estimates miss – is punished severely by Mr Market.

Electric vehicle pioneer Tesla came out with strong fourth-quarter earnings but the market wasn’t impressed by the company’s outlook given its supply constraints. Tesla lost over R100bn in a single trading day, bigger than the market cap of Ford.

The JSE has held up extremely well relative to the major US indices. South Africa’s premier food retailer, Shoprite continued to take market share and announced a great trading update. Especially when you compare it to the likes of rivals Woolworths, Pick n Pay and Spar, which continue to blame the pandemic and civil unrest for mediocre performance. 

Neal Froneman-led Sibanye-Stillwater announced it is terminating its $1bn green metals acquisition in Brazil following a “geotechnical event” that will materially affect the mine’s performance. The seller, Appian Capital Advisory is disputing the claim and will likely take legal action. Did the renowned deal-maker get cold feet on the purchase price or the prospects of a better asset elsewhere?

Lots to digest. Plenty to ponder. Roll on the new week.

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