You're listening to Strictly Business Podcast with Lindsay Williams.
JSC has closed its doors for another day, so it's time for the 5 o'clock shadow.
And as always on a Wednesday, I speak to Skulk Glow, Portfolio Manager at PSG
Wealth Old Oak in Cape Town.
Skulk, you're an organised sort of fella compared to me.
Look, I mean, compared to me.
The big smog.
You could say to...
Anyway, I won't go on with that theme.
Sometimes, though, even an organised person like yourself, do you ever get
overwhelmed with what's going on?
Or do you ever say to yourself, I'm being numbed by what's going on,
so I don't take it in anymore?
And I mean the constant flow of news that comes from areas that shouldn't really
concern us.
In other words, tweets from certain people.
Yeah, certain people.
Let's name and shame.
Come on.
You know what I mean.
I know exactly what you mean.
No, it's a very, very difficult market.
I mean, I just read through, I mean, the S&P 500 opened now.
And to get an idea, you know, what's standing out for us.
And I think the main thing is actually they're mentioning the optimism and
why the optimism.
Well, Trump says the war is, quote, Close to over, unquote.
Exactly.
Exactly right.
I don't know what to believe.
I mean, I look at this and I think, are we going to get the next tweet later tonight
and say,
it's not over, we're closing the strait, and we're bombing the hell out of Iran
again.
I don't know.
I think that's the conundrum we're sitting with.
Yet, when you look at the S&P 500, we are flirting with that 7,000 mark again.
And, you know, approaching new highs.
I mean, who would have said?
I mean, we're sitting with a very tough market.
People, you're talking about something, a possible escalation to a third world war,
yet S&P 500 is sitting at close to being all-time highs.
Crazy, crazy market.
It really is.
And I was saying to a commentator, in fact, I'll name him.
Name and shame, he said earlier on.
I'll name him David Shapiro.
I said to him, David.
What is it going to take for the market to actually say, you know what, we're in big
trouble globally,
and it doesn't matter whether you're in Iran, America, or in
Myanmar. The point is that the world is in trouble because of oil prices being here
and the threat of nuclear war,
and there has been a threat of nuclear war.
If the wrong people have got the finger on the button and certain people have got
their finger on the button that are the wrong people,
something could happen.
It's a 5% chance.
But the point is, what will it take for the market to say, that's it, and I need a
10%, 15%, 20%
sell-off?
I don't want it, but I would have thought when I first started in the markets all
those years ago,
I would have thought this is exactly the right environment for that sort of
sell-off to be upon us.
And it's not.
I can't understand it.
Not to call it a sell-off.
I mean, that's what I'm hearing what you're saying.
You're not...
calling for the market to sell off.
It's just when you sit in the market, and there was a few themes over the past,
let's call it two to three years.
I think we had the theme that, you know, the tariff theme,
and that could put a bit of a dampen on some of the growth rate, we could see
inflation.
I think a massive theme for the past, I would say close to two years,
Is individuals calling tops?
People saying, well, the market, when I say the market, the S&P 500 is trading at
elevated,
not just expensive levels.
It's elevated levels.
It's levels that we've last seen in the 2000s. I mean, this is crazy.
And then you get an environment where we've got such a geopolitical.
You're talking about a 5% probability.
I mean, if we sat here exactly a year ago and we said, what's the probability of
this escalating?
You would have put 2% on it, and the year before that, it was probably not 1%.
This is really mind-boggling to sit in
the difficult geopolitically,
because we're not just talking about the US, Israel, and Iran.
I mean, we're talking about the US, specifically Trump,
calling out some of his best trading partners.
He's calling NATO names, and NATO is the like of the UK, Germany,
those type of countries.
You're talking about naming and shaming.
I mean, the names it's been calling, he's not making friends from yet.
Hey, yet the U.S.
market is flirting with 7,000 points.
I'm not here to understand it.
I'm just here to caution.
I think we're not trying to call tops in this market,
not trying to call bottoms in the market, but I would just caution anybody listening
to this message just to know that this
It's not over.
It's an actual fact far from over.
And one should just know that markets are not trading at cheap levels.
You know, when we saw the COVID-19 pandemic happening,
we had that period between, let's call it March and June, July-ish, where the market
retraced
25-30%. It went from being, ah, it's not cheap.
But it went to very, very cheap levels.
We didn't retrace to cheap levels.
This wasn't a correction correction.
Anyway, it is what it is.
The other thing is that people say, well, the reason the market's doing well at the
moment, when I say at the moment, I mean the last three or four days,
is because of its earning season in the United States.
And the earnings are going to be good.
And the bank's earnings are going to be good.
And I think we saw one bank coming out in the last 24 hours with, you know, dam
busting results.
I mean, it's quite extraordinary numbers.
And I haven't looked at them, but I would imagine if someone said, what do you think
the bank's results are going to be like?
I'd say, well, they're going to be good.
Why is that?
Because the market's been good.
The market's been going to record highs, and they've got proprietary trading desks.
And also, they've been financing AI structures, AI companies, energy, that
sort of thing.
And if you look at the broad set of earnings of these banks, are they as
broad?
As they should be.
It's like saying the market was up 5% over the last month.
Was it a broad-based rally?
I don't know whether it was.
I mean, it's that example.
You'll know better than me what the banks are up to.
But I do think it's all slightly skewed, Skunk.
I don't think there's, I don't think it's a reality.
I don't think the word reality comes together when it comes to Main Street and
Wall Street is what I'm saying.
No, you're 100% right.
I mean...
Yeah, it's just mind-boggling.
We don't need to spend more time on this.
Yes, the banks brought out stunning results.
I mean, wow.
What results currently used banks, people that missed it.
Morgan Stanley, yeah, a whopper, absolute whopper.
We had Bank of America also coming out.
rise in first quarter profits.
That's also, they were looking quite upbeat.
So in general, that is looking good.
I looked at the latest data that I received from, that was once the Reuters
S&P 500 update.
What they do is, as the companies report, they run a dashboard to just show, is it a
beat?
Is it sort of in line?
Or was it a miss?
both in earnings and revenue.
And then it runs it until it runs through all 500 companies.
And it's not a lot of companies that's reported.
It's really been, I think, something like 20 or 25 companies.
Not a lot.
We just started the earnings season.
But those companies that reported, you know, that actually 80%
of them beat forecast.
So one can argue that most probably a lot of...
economists, or let's call it analysts, reduced their forecast for the year as we
went into this,
let's call it, geopolitical unrest.
We know before the whole Iran war, we had Venezuela.
We had the worries about Greenland.
So I think a lot of analysts might have looked at this and said, well, maybe I
should just reduce my forecast.
But still, 80% beat thus far.
This is going to be the interesting one.
Let's get through this reporting season.
Just for interest sake, I had a look at it the other day.
April month, for interest sake, is the best month for S&P 500, usually,
historically.
Interesting.
Hmm, April.
And September's the worst month, and April is the best month.
That's very interesting, isn't it?
Because normally you think October's the worst month, and I don't know what month.
I would have thought January or December would be the best month for the S&P.
But anyway, that's an interesting one.
That's one for the I've learned it from Skulk Notebook, if you like.
No, 65%.
65% of the time we see positive months for the S&P 500.
But more specifically, the best month on average usually is April.
And that's I would say on the back,
usually April we get the first quarter reportings.
And usually it's that's it.
So it's the first quarter reporting.
And I think this year is going to be no different.
So, yes, let's get through this reporting season.
Let's see what Trump does next.
If the war, as you mentioned, is close to being over and they get it over the line,
the straight stay is open.
Let's see where oil evens out because we know that inflation is still the biggest
worry.
We had the IMF brought out the economic outlook yesterday,
and they were sort of muted a little bit.
Not as optimistic as they've been last year.
used to the the world got it come off somewhat.
But that didn't dampen the optimism in markets.
Markets are going upwards.
Let's talk about markets now.
Dollar round is 1637.
Goodness me, that was above 17.
Not that long ago, Skunk, with the dollar being stronger.
Now the dollar has gone weaker again because everyone thinks the war is going
to be over.
So you don't buy the dollar as a safe haven asset.
What a world.
2222 is the British pound against the round.
The euro round is 1932.
EUR$1.1820.
The gold price is 4,808. That's not bad.
After eight minutes of talking, we haven't mentioned the gold price until now.
4,808, down two-thirds of a percent.
The platinum price is up one and a third percent to 21.28.
And palladium is down slightly, down half a percent to 15.83.
It's very, very quiet today.
Even markets need to take a breather sometimes.
What else have we got here?
The South African 10-year bond yield, interesting one, 8.40%.
Stronger, of course, the yield falling since the round has started strengthening
again.
The U.S.
10-year yield is 4.28%.
Still looks vulnerable to me.
In other words, the yield rising, but that's me not believing Trump.
The S&P 500 futures, you mentioned the spot price floating with 7,000.
The futures price, the June price.
7,027, which is up 0.3% on the day.
And going back to commodities, I'm doing it out of order today.
Crude oil also steadying after a big sell-off in the last couple of days.
Brent crude oil, $95.20, which is up 0.4%.
And West Texas, $92.45, up 1.25%.
Bitcoin has had a really good few days.
Currently down, though, 1.5%.
to 74,160.
Earnings season in the US, what's the earnings season been like in South Africa
since we last spoke, Skulk?
Anything that really stood out for you?
I can say nothing because there was no companies that reported today.
Exactly, good.
Lovely, I like that.
What about the performers on the JSC?
What's been up and down?
Because again, this is a day that we don't often see, the JSC Top 40 Index.
Down by 0.3%.
And when I say we don't see that often, it's just because the increment of 0.3% is
unusual.
It's usually much higher or much lower than that.
Yeah.
Yeah, it was a funny day.
Because originally when I started the day, when the market opened,
it was quite optimistic and bullish.
And it was just as the European markets opened up.
or the UK market opened up,
it did lose somewhat of its steam and ended the day in more negative territory.
But in general, I thought it was quite a stable day, a really stable day.
Okay, I've got AlphaMin on the upside of 4.85%, Harmony up 2.8%, Discovery
2.2% better, Bytes up 2.4%, Sasol up 1.8%.
On the downside, the JSC itself, why is the JSC down 7%, Skulk?
Think about that before I go on to Tungela down 4.1%, Quilter down
3.4%, Anglo Gold down 2.8%,
and Goldfields are 2.75%.
Loser.
JSE, XDIV, what?
yeah so all of them except uh um goldfields and angler gold all of them
ex-dev scenario and i think on on the
on the upside of top top performers i i don't think you mentioned shop right shop
right was in the top five as well yeah that was that was up
that was up 2.2 percent for today okay
the other thing uh before we go is um i need to ask you if you uh joined the
crystal challenge the david shapiro's crystal challenge you know the stock
picking competition that he does every year.
Did you join it this year?
Every year.
Last year I had FOMO that I literally just missed out.
And this year I sort of went, like, I need to remember, I need to remember.
And you and I had a conversation about the crystal.
I think you said you had one or two companies.
You've got two companies in.
Yeah.
You joined it.
I entered it.
I just wondered if you entered it as well.
You didn't tell me which.
I know.
I know you didn't.
And you're not going to tell us over.
You're not going to tell us either.
But when you mentioned that, I'm like, oh, no.
I missed it again.
But, yeah, so, yeah, unfortunately missed it again.
But we'll set a reminder for next year.
Yes, exactly.
I'm going to set a reminder as well for my application to running the London
Marathon.
Skulk,
I am out of 490 people who are in the challenge.
Why are you laughing?
You're laughing at me now, aren't you?
Guess where I am.
My goal was to be in the top 10 or the bottom 10.
I don't want to be in the middle with everybody else.
I think you had quite a great feel for the market this year.
So I'm going to be guessing you're going to be closer to that top 10, if not in the
top 10,
than at the bottom because you had quite a...
quite a few good calls out of 490 companies i'm number 386
that's companies people so for all the listeners out there do what lindsey said
don't do what lindsey do
skulk low is uh we won't mention golf skulk low is a portfolio manager at psg
wealth old
oak in cape town and that was the five o'clock shadow the views and opinions
expressed in these podcast are those of Lindsay Williams.
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