‘Magnificent Seven’ reach record S&P 500 influence

The “Magnificent Seven” – a group of major tech stocks – now represents an unprecedented portion of the S&P 500 Index, even though individual performances vary. This group, consisting of Apple, Tesla, Alphabet, Microsoft, Nvidia, Amazon, and Meta Platforms, has reached a record combined weighting of nearly 30% of the index, surpassing several traditional sectors combined. Despite underperformances from Apple and Tesla this year, the tech sector has seen a significant rally. Nvidia has seen exceptional growth, gaining over 80% due to strong demand for its AI chips, while Meta and Amazon have also posted substantial gains. Conversely, Tesla has struggled, with its stock value dropping about 30% amid slower electric vehicle demand.

Accelerate Property Fund requests R300 million in investment from shareholders

The Accelerate Property Fund, co-owner of Fourways Mall, is requesting R300 million from shareholders to address its financial troubles and to reposition the struggling mall, which suffers from high vacancy rates. The funds will be used for debt settlement and mall renovations. This financial move is part of Accelerate’s broader strategy to manage its substantial debt, which has led to asset sales since 2020. The rights issue is expected to significantly dilute existing shares, impacting shareholder value.

Checkers Sixty60 sales surge

Checkers Sixty60, the on-demand grocery delivery service by the Shoprite Group, is highly profitable, having seen a sales increase nearly 11-fold since late 2020. According to the Group CEO, the service benefits from a R35 delivery fee on numerous orders, helping offset in-store service costs. Meanwhile, competitors like Woolworths’ ‘Woolies Dash’ are also profitable, and Pick ‘n Pay’s ‘Asap’ is set to reveal its financial performance soon. The rapid growth of these services highlights a significant shift in consumer shopping habits and the intense competition among major retailers.

Market moves

Oil prices steadied and stocks posted gains amid easing tensions in the Middle East. President Biden’s stance against supporting an Israeli counterstrike further calmed markets. European stocks and US futures were up, with the Stoxx Europe 600 increasing by 0.3% and S&P 500 futures by 0.6%. Oil declined by 0.6%, while spot gold climbed by 0.4%. In cryptocurrencies, Bitcoin surged by 4% and Ether by 5.4%. The yield on 10-year Treasuries rose slightly, reflecting a tempered market optimism

Week ahead

Today, China is scheduled to report on its energy production and retail sales, while the United Kingdom will announce its unemployment rate. On Wednesday, South Africa will release its Consumer Price Index and Retail sales figures, while the United Kingdom will also publish its Consumer Price Index. Thursday’s agenda includes China’s unemployment rate and leading indicators from the United States. Closing the week on Friday, Japan will share its Consumer Price Index data and the United Kingdom will report on Retail sales.

OIG the week that was 15th April 2024