Latest / Strictly Business / The 5 o' Clock Shadow with Schalk Louw

Transcript

The 5 o' Clock Shadow with Schalk Louw · Strictly Business

0:00
You're listening to Strictly Business Podcast with Lindsay Williams.
0:05
The JSC has closed its doors for another day, so it's time for the 5 o'clock
0:09
shadow.
0:09
And as always on a Wednesday, I speak to Skulk Lowe, Portfolio Manager at PSG
0:16
Wealth Old Oak in Cape Town.
0:18
It's a shame that we're on a Wednesday night, Skulk.
0:20
If we were on a Thursday night, we could speak about the US Federal Reserve, the
0:27
European Central Bank,
0:29
the Bank of Japan.
0:31
the meeting between Xi and Trump and all sorts of other things, but we can't.
0:34
We can just look forward to them and speculate, can't we?
0:38
Yeah, exactly.
0:39
I think somebody asked me yesterday what to expect over the next few days, and
0:45
I think my short answer is expect the unexpected.
0:50
It's just so volatile.
0:52
No, okay, let's take the easy one.
0:54
I mean, it's a straight announcement.
0:56
Interest rate enhancement, quarter of a percentage, I think that's pretty much in
0:59
the bag.
1:00
We will find the definites in a few hours' time.
1:04
But as it currently stands, if you look at the CME effect too, they're talking about
1:10
98%
1:12
probability that we're going to see the quarter of a percentage rate cut in, it's
1:16
called, a few hours' time.
1:18
I do think that 98% could just be made 100%, because I find it actually strange
1:23
that we're still seeing a 2%
1:25
probability that we'll...
1:27
We're going to see it unchanged.
1:29
The rest, I think, is especially Trump and Xi Jinping.
1:32
I mean, if you look at the past, let's say to this tomorrow,
1:38
it'd be three weeks ago when Trump had that tweet.
1:44
Yeah, you're right.
1:45
Tweet where he said, well, we need to slap China with a hell of a lot more.
1:51
It was in retaliation to the rare earth policy of China.
1:54
In other words, just withholding rare earth exports to the rest of the world.
1:59
It wasn't just the United States, but the United States, obviously,
2:01
the most reliant upon Chinese rare earths for its various technological
2:07
applications.
2:09
But that was the retaliation.
2:09
Trump woke up and saw this and says, oh, 100%, get on with it.
2:14
He passes it on to his team and then he has a press conference or something.
2:19
In the Oval Office, that's the way he works.
2:22
He just conjures up numbers.
2:24
But then, of course, we hear, oh, there's been a trade deal being done already
2:30
before the meeting with Xi,
2:32
and so it goes on.
2:34
He's just messing with us, Skulk.
2:36
He's messing with us.
2:38
No, he is.
2:40
And we know that after that, I think it was a week later, yeah, it was a week
2:44
later,
2:44
which is now a week and a half ago, he actually...
2:48
tweeted and he said and yes again right tweeted he told the world that um you know
2:55
the
2:57
the trade war with china is definitely escalating and then less than a week later
3:02
these two are best buds i mean trump
3:05
just says well you know what we're so close to a a deal and things are
3:12
really looking good and we've seen the market since then i mean suddenly that the
3:19
dollars improving.
3:21
I mean, the gold price, as I saw it, is behind.
3:23
I mean, and most of the other precious metal prices as well.
3:28
And it's just, what problems?
3:30
There was no problems between the US and China.
3:32
And it's, before you go on, there's a new book out from a reporter,
3:39
journalist from ABC News in the United States.
3:43
Now, ABC is one of the fake news channels, according to Trump.
3:46
Now, He famously said to this chap, he says, you have hate in your heart.
3:53
During a question and answer session, he singled him out and said that.
3:58
But this chap said that I've known him since 1994.
4:04
And we've actually had really cordial relations.
4:07
But he feels as though he has to say this sort of thing in front of people, but
4:12
quietly,
4:14
straight after this rather nasty altercation.
4:16
He said to him, how's it going?
4:19
How's the family?
4:19
You know, maybe we should get together and that sort of thing.
4:23
He's completely inconsistent, this Trump fellow, as we've said on many occasions.
4:28
But it really hit home last night.
4:30
I think the book is called Retribution or something.
4:33
It's about all the people he's gone after in his second term.
4:37
And I think I might buy it, Skulk.
4:40
It'll be another one gathering dust on my bookshelf the next time we speak.
4:45
Yeah, December holidays are coming along and I always look for nice things to read.
4:50
That might just be something I'll read as well.
4:52
A client phoned me after that and his question was, Looking at Trump,
4:59
is he mad?
5:00
Oh yeah.
5:01
Is he stupid?
5:02
Oh yeah.
5:03
Which is absolutely brilliant.
5:06
And I, my answer was yes.
5:09
Yes to all three?
5:11
I think it might be all three.
5:12
It could be.
5:14
You can't achieve what he's achieving and how he achieves certain things
5:22
without having method to your, and pun intended, madness.
5:27
I mean, it's, it's.
5:28
It's unbelievable what's happening.
5:31
And my second reply to him was, you know, we're sitting on the 29th of October.
5:37
And in three months' time,
5:40
we will be exactly one year into his four-year term.
5:45
And it's already murmuring that he's going to be the beautiful president that's
5:51
actually going to be able to run
5:53
for third.
5:55
This is what Steve Bannon says.
5:57
I don't know if you subscribe to The Economist,
5:58
but Steve Bannon has had a lengthy interview with the editor-in-chief of
6:05
The Economist.
6:05
And he says, without doubt, he's going to be running for a third term in 2028.
6:12
And he's one of his chief advisors.
6:14
And that's another thing that this ABC chap said.
6:17
He said, during a very important meeting of the cabinet, when they were all trying
6:24
to persuade him to do something he didn't want to do, he said,
6:26
get Bannon on the line.
6:28
He put Bannon on speaker.
6:30
And Bannon called,
6:32
he called Yelensky that effing something.
6:36
And he said, OK, so we're not going to do this for Ukraine because of what Bannon
6:41
said.
6:43
And Bannon says, 2028, it's going to happen, Skunk.
6:45
It's going to be attempted, let's put it that way.
6:49
Yeah, I mean...
6:50
It's so many things can happen.
6:52
I mean, Trump is not young.
6:54
I mean, there's so many things that could happen.
6:56
But just the pure thought of having another four years.
7:02
I mean, we're talking about,
7:03
I still need to see us get getting through this next three years and three months.
7:11
I mean, because this past nine months, 10 months,
7:16
it's just been crazy.
7:19
What's happened?
7:19
I mean, the amount of seesawing that the markets, yeah, I still stick to it.
7:25
Expect the unexpected.
7:28
We've seen what oil price did a week ago when Trump just turned around to China and
7:35
said, well,
7:37
just please sanction these two oil producers, these Russian oil producers.
7:42
And just a small fact of the matter, these two oil producers, Chinese,
7:50
Russian oil producers produce around about 5% of the total globe's oil.
7:55
Yes.
7:56
And we saw the reaction of the world price.
7:58
I think the world price that day was something like 5% or 6% up.
8:02
And then everything just sort of murmured down.
8:04
Everything was fine again for the past week.
8:08
I think we are in for a crazy time.
8:12
And I can't tell you.
8:13
I mean, if you ask me where we're going to sit just at the end of this week, I
8:20
literally can't tell you.
8:22
I literally can't tell you.
8:24
Make sure that your portfolio is well diversified for both actions because, man,
8:27
we're going to be in.
8:28
And then add into this mix, the next few days, I mean, I think Wednesday,
8:35
today alone, we've got Microsoft, Alphabet,
8:41
and Meta who's going to be reporting.
8:44
And then followed on Thursday by Amazon and Apple.
8:48
Oh, my goodness me.
8:49
These firms that I just mentioned make up 25% of the S&P 500.
8:54
So literally in the next, let's call it 24, 48 hours, we're going to have the
9:00
biggest firms,
9:02
which is...
9:04
Have they guided?
9:06
Have they guided satisfactorily?
9:08
Or do they do the guidance a little bit closer to the actual results than they do
9:09
in South Africa?
9:11
Yeah, they did.
9:12
And these days...
9:14
I don't want to say it's very similar to 2000, where the guides are a lot less on
9:19
earnings.
9:21
Back in 2000,
9:23
it was more to do with how many computers have we sold and how many Windows packages
9:27
have we sold.
9:29
And it was more that the revenue will ultimately be converted into earnings.
9:34
Now, they're talking about what's the
9:39
CapEx predictions for 2026 in terms of what's going to be your...
9:47
AI-related CapEx.
9:49
And you want to take a guess, just these companies and they have Microsoft,
9:54
Alphabet, Meta and Amazon,
9:56
what are they combined expected or projected?
10:00
CapEx is going to be for AI-related spend.
10:03
I would say probably each must be spending $100 billion, something like that.
10:09
Yeah, that was actually great, and it's very close to being spot on.
10:14
All three of them,
10:17
all four of them are projected to spend $420 billion on AI-related CapEx.
10:23
And this year, that spend was $360 billion for these four companies.
10:29
So it's not going to stop.
10:33
And this is just, I mean, one of my colleagues sat in the morning meeting this
10:38
morning when we discussed this.
10:40
And just, I know he's going to listen to this and he's going to know exactly what
10:45
I'm talking about.
10:47
But he must be the guy that went over to something like WhatsApp,
10:50
the latest of any human being on the face of this earth.
10:54
But I mean, his words were, I just can't comprehend these.
10:59
And just think of these, how are these money ultimately going to be made?
11:05
How are we going to justify 420 billion?
11:08
In other words, they're going to have to increase.
11:10
It's not just their own profits, but it's also the GDP of the nation in which they
11:16
do business, i.e.
11:18
the United States of America mainly.
11:19
I saw a very good article about it and I didn't understand it, but it was all to
11:23
do.
11:24
where GDP would have to grow a certain amount in order to justify the amount of
11:30
money that's being spent on AI
11:32
in the CapEx field, and also the amount of electricity that's got to be generated.
11:37
And will it be the biggest waste of time?
11:42
What did Meta do, the metaverse?
11:45
Wasn't that a giant waste of time?
11:49
Again, it sort of drifted off.
11:52
Luckily, the headlines became AI headlines rather than failure headlines for a
11:58
previous project.
12:00
But yes, you're right, Skalk, 420 billion.
12:01
And it's fear of missing out, of course.
12:04
If one is spending 100 billion, the other one's got to spend 150 billion in order to
12:10
poach more people.
12:12
Have you seen how much money these people are being offered?
12:13
100 million sign-on fees, that sort of thing.
12:17
It's a crazy, crazy, crazy environment.
12:21
And to your questions, did this excite, you know, after this announcement on the
12:28
CapEx, after the announcement,
12:30
Amazon's share rose 1%, Microsoft shares gained 2%.
12:33
No results, no, nothing.
12:35
It's just, there's a general optimism.
12:40
Suddenly, it's back.
12:42
So, yes, you've got this very weird political, geopolitical environment.
12:49
where we're currently finding ourselves, but also a very, very interesting
12:56
valuation scenario.
12:58
Because the markets are still very much driven by these AI-related type of
13:04
companies.
13:04
There's one thing I would like to say, because we've been rambling on about money
13:08
and AI, etc.
13:10
And we've got to wait for their results next week, if they disappoint, which I'm
13:15
sure they won't.
13:17
then the risk is to the downside.
13:18
But let's not forget about that.
13:19
Let's look at the Fed tonight, because that's the big one.
13:22
That's the first step.
13:23
They'll cut rates.
13:25
Everybody knows that.
13:27
But afterwards, if there is some kind of hesitation about the second cut,
13:32
this is the penultimate Fed meeting of the year, by the way.
13:35
There's another one coming up, obviously, before year end.
13:38
If there is any hesitation that there might be a rate cut for the last meeting
13:43
of the year,
13:45
then the risk in the market is to the downside scale, isn't it?
13:49
I mean, it's price for perfection at the moment with the S&P futures 6,938 at an
13:55
all-time
13:55
record high.
13:56
And I saw a couple of weeks ago people say, maybe we could see
14:00
7,000 in early 2026 for the S&P.
14:06
It's just like the gold price.
14:08
We might see it at 4,000 when it was 3,800 or something.
14:12
It's that sort of prediction.
14:14
It's now almost there.
14:15
So the slightest chink in the armor of the bulls, and we're going to come crashing
14:21
down.
14:23
Just briefly, though.
14:25
Yeah, it's interesting.
14:26
Let's first see who's going to hit that 7,000 mark first, gold or the S&P 500.
14:33
Gold's been fun, hasn't it?
14:34
Yeah, it's been a fun year.
14:37
But local front as well.
14:39
I mean, back to markets and...
14:42
I would say not today's movements, but I think today's news.
14:46
It's this upcoming listing of Optasia.
14:50
Lindsay, you don't know how many times I need to pay you.
14:53
The Disney movie reference.
14:56
That's it.
14:57
That's it.
14:57
I mean, for the listeners out there, Lindsay, I think we chatted about when you
15:03
mentioned Optasia.
15:05
I think your first question was, it sounds like a Disney movie.
15:06
And now I can't get rid of it.
15:09
And this week.
15:11
I can't remember.
15:12
I think it might have been Monday or Tuesday.
15:14
Yeah, it was Monday.
15:16
There was an announcement both for Aptasia and Astoria.
15:20
And I'm sitting at this, and when I said Astoria are going to delist from the JSE
15:27
and Aptasia is going to be listing on the
15:29
it sounds like two Disney movies now, not just one.
15:33
But, I mean, talking about the one Disney movie, and it's currently a Disney movie
15:40
story because, I mean, we all know that
15:42
Michael Jordan is one of the largest shareholders.
15:44
and also can be involved on the management side.
15:48
So I've got great respect.
15:51
I think he's one of our, let's call it,
15:53
our leading intellectual capitalists in South Africa.
16:00
I mean, he's just phenomenal.
16:04
It's really a 360.
16:08
I mean, we know a few years ago he was the CEO.
16:12
of FNB and then he eventually said he's finished and he started things like
16:19
Optasia and what was it Bank Zero and this week we've a lot past
16:25
few weeks we didn't just have there's a story about Optasia we know the Saka
16:32
Technologies they they bought
16:34
Bank Zero for 1.1 billion rand the you know more fintech stories we've had
16:39
old mutual I think earlier this week They mentioned that they're buying 10X for, I
16:46
think,
16:47
2 billion rand, or 85% at least of it, but it's pretty much a buy.
16:53
And then NetBank, they bought that at Kauka.
16:57
And yesterday, the announcement came up, two days ago, the announcement came, there
17:02
we go,
17:02
F&B just bought 20.1% of this Optasia for 4.7 billion.
17:09
So, I mean...
17:10
going from they clearly knew whom they they work with i mean this uh this is not
17:17
just a great maybe they've been given
17:19
not privileged information but uh pertinent information another p word
17:24
pertinent not privileged from from the person
17:26
concerned sounds
17:28
like it could be possible yeah without breaking any rules of course no no no for
17:33
sure but but remember they
17:35
they know most probably know michael erdogan better than any any any other
17:39
company out there i mean if If...
17:41
If it was the CEO, naturally the companies should know them better.
17:45
But be that as it may, they've now bought over 20% before the listing.
17:49
Listing expecting on the 4th of November.
17:55
It's been postponed.
17:55
I think it was a little bit earlier.
17:56
But now we're going to...
17:58
And Michael Jordan had a tweet today where we actually...
18:02
And I'm going to read this.
18:02
Optasia order book is now covered multiple times at 19 Rand.
18:09
The IPO pricing and allocation are expected to be released on Thursday.
18:13
So by tomorrow, for the listeners out there that don't know what I just read,
18:19
what this tweet basically says is by tomorrow, you will know if you applied for
18:25
Optasia shares,
18:27
you will know what allocation has been given to you.
18:28
And then on the 4th of November, it will make its listing.
18:32
But by the looks of it, when somebody says, you know, the order book has been
18:38
covered,
18:38
multiple times do not expect if you put in a hundred thousand rand to buy up to your
18:45
shares
18:45
probably get five yeah exactly yeah your chances of getting your hundred thousand
18:51
rand will be really really
18:53
so very very you know what it is i mean obviously a
18:56
great pedigree management wise a good product as far as i know but also the
19:03
complete dearth of new listings that has been on the jsc
19:07
for so long and with the markets doing what they're doing you fund managers are
19:13
awash with cash skulk
19:15
yeah no it's um it's it's it's actually optimistic i'm glad to see this i mean
19:21
because we've we've
19:23
been focused on the companies that's deal listing on
19:25
the the woes of the jse i mean we've been talking about the net foreign sellers
19:31
which we still see
19:33
uh on on on the jse but but We've been so focused on...
19:35
the net foreign sellers.
19:37
Well, the first step is there.
19:38
Last Friday, we've been removed from the gray list.
19:40
And clearly already, you can start seeing, not talking about just Optasia,
19:43
you can start seeing some interest again coming towards the JSC.
19:48
And I wouldn't be surprised if we see a few more people.
19:53
What was the other company?
19:55
It was SAB. What was that?
19:57
The bottling company?
20:00
The Coca-Cola bottling company.
20:02
Coca-Cola bottling.
20:04
That's going to be a secondary listing on the JSE as well.
20:07
That is going to be big.
20:08
I think they're talking about a $44 billion listing.
20:12
Naturally, it's going to be secondary, but still, this is positive for the JSE.
20:15
Be there, Sidmaye.
20:17
I'm going to look at this.
20:19
I think I would like to get a David in, but David mentioned the other day, he
20:26
said, well, this might be a good stack,
20:28
sort of quote unquote.
20:30
And for the listeners out there that don't know what we're talking about,
20:30
this was sort of an analogy that was used back in the days where you sort of could
20:37
apply for shares and
20:39
immediately win the list.
20:41
Sell them.
20:43
You sell them again and you're trying to make a bit of a profit.
20:45
This could just be, I mean, you just mentioned, And this could just be.
20:47
be a company, it's got the right buzzwords.
20:50
It's got fintech.
20:51
It's got AI.
20:53
And their clients, or they call it their business partners, are the likes of the
21:00
MTNs, the Vodacoms.
21:02
And also on the banking side, they've got Standard Banks and now F&B.
21:06
My first point was, I think we had this discussion when we talked about the Disney
21:12
movie for the first time.
21:14
I would not be surprised.
21:16
If their business partners say, wait a minute,
21:17
you can actually use AI to look at the credit scores and sort of mitigate any
21:25
possible bad debts.
21:27
I mean, this could be a good company to buy and put into a MTN or into a F&B.
21:34
Well, the first step has been made.
21:35
F&B has already said, we'll take a fifth of the company.
21:38
And I would not be surprised if we see some action.
21:42
going forward in the next few weeks.
21:44
It's got all the ingredients, hasn't it?
21:45
It's got a scarcity of new companies coming to the JSC.
21:49
It's got the management we've spoken about.
21:53
It's doing all the right things at the right time with the right products and
21:58
with the right management.
22:00
And goodness me, it's going to fly, Skulk.
22:01
If the market conditions are as they are at the moment, it'll fly.
22:05
On the other hand, it could be one of those things where you look back and you
22:12
say, That was when the market peaked.
22:14
We knew when that Disney movie listed.
22:15
That signalled the end of it.
22:18
Sorry, Michael, if you're listening.
22:22
OK, let's have a look at some numbers now, because we've been rambling on like a
22:28
couple of old fishwives.
22:30
Here we go.
22:32
Dollar Rand, lovely.
22:34
It's going to break the big figure of 17 very soon, and from the wrong direction,
22:36
it's going to go 17 to 16.
22:38
right direction for south africa in my opinion 1711 at the moment though the
22:44
dollar round euro round is
22:46
1993.
22:46
uh euro parting like it's 1993.
22:50
the euro dollar or not on the other hand uh euro dollar 116.50 which is virtually
22:55
unchanged pound
22:57
132 32.
22:58
um okay over to the gold price i know this gold price i've been watching every day
23:03
And it was two Fridays ago that it hit 4,391,
23:08
came crashing down on the Monday and got to 42.50.
23:14
Excuse me.
23:15
Then the next day it went up to 4,398, within a whisker of 4,400 on my screen
23:21
anyway.
23:22
And then, since then, in a period of about eight days,
23:26
it fell to a low of just above 3,900.
23:31
So let's say that this is close to a $500 fall in a 10-day period,
23:37
Skulk.
23:38
How's that?
23:40
I mean, that is incredible, isn't it?
23:42
If you're a gold bull, not nice.
23:44
There was a great meme.
23:45
I need to tell you this, Liz.
23:46
It's a great, great meme.
23:47
It's Matthew McConaughey sitting on this photo, and he's, like, all buffed up, and
23:52
he's shiny.
23:54
I mean, even his skin is golden, and he's got this massive smile.
23:59
And then it says...
24:01
the gold what is it uh what is it uh gold traders when gold hit four thousand
24:07
dollar on the
24:08
7th of october and then it next thing is this bleak it looks like he's gonna die
24:15
any second he's
24:17
white he's pale he's thin he just looked like he's gonna die any second don't tell
24:22
me it's gold traders when gold hit four
24:24
thousand on this date yeah exactly i thought it was brilliant and such a
24:29
stunning way of of explaining exactly where we're sitting ah gold price four
24:36
thousand dollars again i think four
24:38
thousand and nine i'm going through the numbers four thousand and nine at one and
24:43
a half a cent and i just wanted to just add before we
24:45
before we forget i mean you mentioned the the currencies and it's a it's a it's a
24:50
stunning point you're making i mean it's going to drop
24:52
to the wrong side basically improving from 17 to the 16 levels pretty soon i mean we
24:57
it
24:59
seems like that's sort of a...
25:01
No brainer, it's going to happen.
25:03
But interesting one.
25:05
You know, I like my data.
25:07
We've had three quarters in a row now where the rent
25:11
improved against the US dollar.
25:14
That's a long time since you've been able to say that.
25:17
That's it.
25:18
The last time we've seen that was in 2020.
25:22
And remember why that's significant.
25:25
In 2020, we had the run-up to the junk status.
25:30
We've been downgraded to junk status.
25:33
That was March, I think March 2020.
25:37
And remember, straight after we've actually been downgraded, before that is
25:43
called a downgrade,
25:45
we've just...
25:47
Every single quarter,
25:49
we've seen the RAND lose ground against the US dollar.
25:52
Every single quarter.
25:53
So I try to go back.
25:54
I think you didn't see any three quarters in a row.
25:57
So literally, this is the longest positive run for the
26:03
RAND in at least five years.
26:07
And if you strip out that three quarters,
26:11
then this has been the best run we've seen in the RAND.
26:14
pretty much for 10 years.
26:15
So this is a great moment.
26:17
It's a great moment.
26:18
And as we sit here, 29th of October, into the fourth quarter, we're again stronger
26:25
for this quarter.
26:27
I don't want to jinx it.
26:29
I don't want to jinx it.
26:31
Too late.
26:33
I can't see.
26:35
I can't see any four quarter for the past decade in a row where we've seen the round
26:37
improve.
26:38
So here we go.
26:38
Here we go.
26:39
Fingers crossed.
26:39
I don't know how you hijacked me on the giving the commodity prices to an analysis
26:45
on the Rand and other currencies.
26:47
But now you've got me going because, you know, I know you're sensitive.
26:49
You know, as you get to a certain age, Scott, you become sensitive about your
26:52
age.
26:52
And I can sense that you're doing the same.
26:55
Before you know it, you'll be buying a convertible.
26:58
You're talking about a midlife crisis.
27:02
And opening another gym membership.
27:04
But if somebody says to you, Scott, I'll call you, by the way.
27:07
and you'll say to them, I'm approaching 50, but from the wrong side.
27:13
That's always a good joke.
27:20
Yeah, I might just use that one.
27:22
You must use that.
27:23
I've nicked it from somebody else, the great Barry Humphries, the comedian.
27:28
But anyway, stop interrupting me.
27:31
The platinum price is 16.05, which is up 1.3%.
27:35
Palladium is up 2.1%.
27:37
to 14.48.
27:38
Now let's have a look at some other commodities because they've been
27:42
fascinating.
27:44
64.85 is the current Brent crude oil price which is down
27:49
1.2 percent.
27:50
60.64 is West Texas crude which is down 1.1 percent.
27:56
What am I talking about?
27:57
Brent crude oil is 65.16.
28:00
The screen has just refreshed.
28:02
Delete the last 30 seconds.
28:04
65.16 for Brent Crudeall.
28:06
Up.
28:07
1.1 percent and west texas 60.79 which is up 1.1 percent as well the copper
28:13
price is now
28:15
5.24 per pound up 1.9 percent on the day and it's
28:23
in a very tight supply demand balance and because of a an incident at a
28:29
prominent mine they're losing two to three hundred thousand tons of production.
28:36
So that's tipped the market a bit, and it's been going like this for two weeks
28:40
now.
28:40
So looking pretty good.
28:42
Look at any copper chart, and you'll see that this is in a bull market.
28:46
It's almost paying it's catching onto the coattails of the precious metals.
28:51
It's up over 21%
28:57
for the past 12 months.
28:58
That is big.
28:59
You didn't mention iron ore.
29:00
I mean, iron ore is an interesting one because people I mean, I've been in quite
29:05
a few interviews.
29:07
this this past it's got a few months where a lot of people just sort of got the view
29:12
that that iron oil prices will
29:14
be dwindling downwards and they were sort of right until july it did go from run
29:19
about the
29:19
105 ish dollars
29:22
per ton um to just below 94 dollars which which people forecasted but
29:29
slowly slowly it caught the woman again it's right back from july up to now it's
29:34
back
29:35
close to its highest for the year, back to close to $106 per ton.
29:39
We saw the trading update coming from Kumba yesterday, and that had a really,
29:45
really positive effect on the share price.
29:47
And so it's, yes, we've had this conversation.
29:51
The precious metals kicked up.
29:52
It was first gold, and then shortly after that,
29:56
we had its little brothers.
30:00
That ran.
30:02
And then by April, people realized, wait a minute, there's more things that shine.
30:06
um and and there there went platinum palladium rhodium those prices copper just
30:13
to to medley medley
30:15
went it went up and still going upwards and now copper's got proper fundamentals
30:20
though you can say gold gold and
30:22
silver and you know their shine and their stores of value and everything but copper
30:26
is part of the whole ai
30:28
uh tech revolution behind the scenes and uh There's the demand equation.
30:32
The demand side of the equation in copper is very compelling for any potential bull.
30:37
Anyway, we've done that one.
30:38
South African 10-year bond scale, 8.84%.
30:42
Goodness me.
30:43
If you're talking about foreigners coming in and buying equities, they must have
30:47
been buying bonds.
30:49
That was 11.09% in early April, 11.09% the yield.
30:53
It's fallen to 8.84%, which is an inverse relationship between the yield.
30:58
and the actual bond price, the bond price through the roof in South Africa,
31:02
and also in the United States to a lesser extent, the U.S.
31:07
10-year bond yield is 3.999%.
31:10
Now, my trade of the day, Skulk, for when we next meet, is sell the U.S.
31:14
bond market because it's all baked in.
31:16
Everything that the Fed is going to say tonight, Jerome Powell, soon-to-be
31:23
ex-chair, is going to spout on.
31:25
But I think that that yield will rise.
31:25
In other words, the bond price will fall.
31:27
So I'm a seller of the US 10-year and will work on the yield of, let's say, 4%.
31:32
The yield will be higher the next time we speak.
31:35
S&P 500 futures, I told you earlier on,
31:40
it was 6,938.
31:42
So I'll have to take that because my screen's not working.
31:44
6,939.75 to be precise, up to
31:50
0.2%. Nothing will happen for the next three or four hours.
31:53
Okay, I think that's about it apart from Bitcoin.
31:56
Skullclaw, I've got Bitcoin trading at something.
32:01
It's been down to 108 up to 125 in the last two, three months.
32:07
Currently just below 112,000, down 2.5%.
32:11
Somebody recklessly said you'll never see it below 100,000 again.
32:15
Cue the big sell-off, I reckon.
32:19
JSC Indices, if you would.
32:21
Or have you fallen asleep?
32:22
No, there you are.
32:23
Go on.
32:25
Where were we?
32:28
No, it's just thinking about your opinion,
32:33
looking at a bond retracement or bond yield retracement,
32:40
basically a drop in the prices.
32:43
That is an interesting one because I do share it.
32:46
And for listeners out there, if you want to extrapolate, if you want to look at
32:51
this, and let's say you're 100% right.
32:53
then you will see the dollar much weaker.
32:56
So that brings in that dollar-rand.
32:58
If the rand even does nothing, we will see it go to the
33:02
16-rand levels in a pretty short period of time.
33:06
So the dollar will be weakening if that's the case.
33:10
If you've got the viewpoint that we're going to see long bond yields increase and
33:17
the
33:17
dollar weaken, that suddenly brings the gold price.
33:21
again into play again because we know that there's a big big inverse correlation
33:28
there as well weaker dollar higher uh
33:30
bond yields usually a higher higher gold price so interesting one i do agree i
33:36
would agree with your thought so one we could maybe
33:38
chat about again in the next few weeks and see we certainly will but i think it's if
33:43
i was doing anything i'd be buying um i'd be
33:45
buying relatively short-term puts in the u.s bond market both the 10-year and the
33:49
30-year that is just my
33:51
recommendation my thoughts certainly not that of psg wealth old oak uh let's do the
33:57
indices indices
33:59
yeah and value traded if you would jse all share close to that 110 371
34:03
points that was up 0.5 of a percentage resources again recovered today
34:08
2.81 percent up while industrials just just kept itself in the red today was down
34:15
five
34:15
basis points uh financials after a fantastic day yesterday day.
34:20
They took a bit of a breather today, down 85 basis points, while the SA property
34:24
stocks,
34:24
they were down 0.4 of a percentage.
34:28
Value trade in the market, not the most active day.
34:32
Yesterday, we had a $36 billion day.
34:34
Today, only $23 billion.
34:37
I'm not going to jinx this because Lindsay and myself have been talking about this
34:40
last year.
34:40
We would high-five each other.
34:42
Actually, we'll give ourselves a high 10 if we see a $23 billion day.
34:47
Quiet a day today, but still.
34:49
keeping itself way above the 20 billion mark for today.
34:53
Finally, very finally, you asked if he's mad, you asked if he's stupid, you asked
34:59
if he's brilliant.
35:01
His name is Donald J.
35:03
Trump.
35:05
I sent you, or actually I may have not sent it to you,
35:07
but there's something called the Lincoln Project, which I follow on
35:11
X. And they came up with something that's rather interesting,
35:15
and that was a video of Trump with the new Japanese Prime Minister.
35:21
I don't know if you've seen this.
35:23
But it says here, the Lincoln Project, I suggest you follow them.
35:28
They're not exactly your big friends of Trump. They say, watch this video,
35:32
then ask yourself why in less than one year Trump has had two annual exams,
35:36
taken at least one cognitive test that we know of, been hiding large bruises on his
35:41
hands,
35:42
had an MRI for something last week, exhibited facial drooping,
35:46
has severely swollen ankles the size of stovepipes and walks around aimless like a
35:52
lost...
35:52
blind dog you see this video and he's he's being escorted to inspect some japanese
35:58
troops
36:00
and she stops and he carries on walking and he's walking from side to side he
36:05
salutes and then
36:07
wanders off and she sort of looks at him and and you know puts her hands out and
36:12
says where where has
36:14
he gone where is he going he just wanders off it's very very it's it's it's funny
36:19
but it's sad in the
36:21
same way.
36:23
Because his pills have worn off, you see.
36:25
It's really bad.
36:27
I'll send it to you.
36:29
Please do.
36:31
The Lincoln Project on X.
36:33
Skullclaw is a portfolio manager at PSG Wealth Old Oak in Cape Town.
36:34
And that was a very long five o'clock, but very enjoyable five o'clock shadow.
36:39
The views and opinions expressed in these podcasts are those of Lindsay Williams and
36:46
various contributors and do not reflect the policy,
36:48
position.
36:50
or opinion of any other agency, organization, employer,
36:51
or company associated with StrictlyBusinessPodcast.com.
36:55
Assumptions made on the analyses are not reflective of the position of any other
37:02
entity other than the speaker or the author.
37:04
And since we are critically thinking human beings, these views are always subject to
37:08
change, revision,
37:10
and rethinking at any time.
37:11
Please do not hold us to them in perpetuity.