You're listening to Strictly Business Podcast with Lindsay Williams.
The JSC has closed its doors for another day, so it's time for the five o'clock
shadow.
Usually it's Viv Govender and David Shapiro, but David Shapiro is AWOL today,
so Viv and I are going to soldier on and set the world to rights.
It's getting messy in the States, isn't it, Viv?
I mean, yesterday was quite astonishing what happened around about this time,
actually.
Yeah, look, the basic thing was um The rally that we saw after that,
basically, what would have been a week or two ago, one of the worst case scenarios
in terms of outcomes for the tariffs.
It just shows basically how confused,
how kind of stressed the market is at the moment.
That even a reduction like what we saw yesterday in terms of the implementation
and so on
was enough to estimate what is, I think, one of the biggest rallies in history.
You know, a single day rally, especially from the low of the day.
but the day started not that great but ended incredibly high.
Today we are not seeing the same kind of thing.
We are seeing definitely profit-taking.
There's no other word for that.
But also I think that at the moment, the S&P right now is down 3%,
which in normal times would be a significantly negative day.
But after what happened yesterday, it's just like a small correction coming
through, a small consolidation of profit-taking coming through.
I can't help feel that given the poorest nature of the White House and this little
clothes club they've
got, there must have been several individuals that made an absolute fortune
on the way
down and a massive fortune yesterday as well.
And I know, you know, it seems too obvious, but often the things that are too
obvious are indeed the case, Viv.
This is actually, you could call it a feature of a bug of the US system.
I don't know about staff members, but politicians definitely.
Congressman Nancy Pelosi famously, if you follow Nancy Pelosi's traits, you're going
to be making a fortune.
She outperforms the market significantly because you often buy or rather her
husband buys and sells stuff that
seems to be quite closely correlated with stuff that his wife should have known in
Congress because of senior position.
There is this weird thing in the U.S.
where politicians have this ability.
to trade uh you know amazing as it may seem the i think there's a
restriction on like you know uh on staff members you know that's why your office
like cabinet members etc having to sell their uh you know
assets but the politicians in the us have this ability to basically go buy and sell
stuff but here's the thing i mean uh trump
announced it i think a few hours before the actual thing by saying now is the time
to buy it's
possible that some of his monger people basically got you know
Tukulus was convinced by that and just bought like I said he did announce
it a few hours before he actually did the announcement he didn't announce what he
was going to do he just said this is a great time to buy effectively
and that might have been it's very unusual, he can't keep himself to himself
he can't keep his mouth shut something pops into
his head he just wants to talk, he wants to tell people he wants to be the hero
I mean yesterday after the rally he said he said And I found it a little bit
offensive, actually.
He said the biggest stock market rally in history.
Firstly, that's incorrect.
But, you know, everything that comes out of his mouth is often incorrect.
But he said, OK, biggest stock market rally in history.
And then he said, not bad, eh?
I mean, he seems to have forgotten the previous 10 days or so where he wiped it
all out and
then brought it back up again.
It was just a corrective rally, for goodness sake.
I mean...
Here we are down again about 1.7% for the S&P.
It's not over yet.
I just can't make any sense of it anymore, Viv.
And I'm sure you as a portfolio manager can't as well.
You have to try and just sort of focus on things like inflation coming down from
2.8% to 2.4%
during the month of March in the United States of America.
I'm wondering whether that's the last of the low inflation prints that we see.
I'm sure that's what you do.
You're probably one of those people that can put on blinkers.
and just forget about the noisy stuff?
I don't know, actually, because, like I said, I mean, it was a few years back, you
know, when we were having all those, you know,
a few years ago, remember, we had everything was about the interest rate
announcements, you know,
what was the latest stimulus package from the ECB or the Fed, et cetera.
And it didn't really matter what company news looks like.
It didn't really matter what anything else looked like.
It was just all about the stimulus.
The moment, unfortunately, is all about whatever Trump is thinking of on the day.
Because, you know, as much as you might see a highest inflation number, normally
that will bring markets down a few percent.
If Trump was to come out and says, I better deal with everybody, and there's no
more tariffs, and even China is going to get, you know, no tariffs as well.
Mark would rally so much, it would basically overwhelm any negative news that
we would see.
And in coming to, like, you know, in terms of, like, his approach to this,
I don't think this time around he cares so much about what the stock market does.
He cares more about...
the stock market is basically responding to whatever he does if you know what i
mean yeah i think he's kind of very well think of it he had this massive
downturn over the last couple you know days or end of the last week especially
and what does he do he goes on a
golfing uh to a golf competition and basically plays there and boasts about
winning it i
think nothing like you know tickles his ego more than the world burning while he
was playing golf you know what
And that's the other thing.
That's what led me to believe that there might be some shenanigans going on, some
naughtiness, some insider trading, in other words,
because he was so calm all the time.
He was calm about the market falling.
And he said, I don't watch the stock market, famously, during the early stages
of the route.
And I said to myself, yes, you do.
You watch it every single day.
It's important to you.
But the reason you're so calm is because you're short the market, Mr.
Trump.
That was my first thought as a cynic.
But then yesterday with the two-hour, you know, great time to buy story ahead of the
90-day pause.
I mean, that was just outlandish to me.
Ah, well, he'll never be found out.
And if he was found out, he'd just sign something.
I'm not sure it's illegal.
That's the thing.
I am not sure that it's illegal because, like I said, there is this well-known
tradition in the U.S.
of politicians trading.
i think it would be legal if someone like for instance uh you know the secretary uh
treasury or something actually the treasury secretary or you
know an admin official traded but i'm not so certain uh what the rules around
virtual select politicians trading
are because like i said i mean it's famously known that you know uh both
the democrats and republicans uh have some of the world's best traders in congress
and the senate you know if you look at the performance of like like
i said you know some of these guys portfolios on both sides of the aisle
these
people would be the best traders in any investment bank in the world and it's not
because they're so smart it's because they literally are using inside
information there was cases of people basically selling the market uh when code
was breaking because they got briefed about it ahead of time
uh there's cases of uh people buying and selling you know things like boeing and
other you know other
manufacturers because they know which contract is being approved or not approved
yeah uh so this is a this is a weird thing about the us
Trump would not be affected.
I'm not so sure, but I don't think Trump would be affected.
I think if there was other people in his administration that did it, they would be
affected.
Interesting stuff.
We'll never find out, of course.
It's a closed shop.
I'm not sure you're right when you said it's not illegal because it's a highly
regulated industry in the United States,
financial services.
OK, it's been undone a little bit by Trump, but the basic rules and regulations
are there.
And to profit from inside knowledge, I can't.
imagine that it's legal anywhere in the world.
Anyway, let's have a look at...
Remember, the politicians write the rules and regulations.
That's the thing you must understand.
The politicians write the rules and regulations, and they have made how lax
the trading rules are.
All right.
Well, that's something, as I said, we'll never, ever find out, unless some really,
really,
really assiduous journalist gets his teeth into it and won't let go,
like a savage dog.
Let's have a look at some prices.
Actually, before we do, What I'd like to ask you is, how have the Magnificent Seven
stocks, the high-flying tech stocks,
the ones that you favour, how have they behaved?
Have they behaved predictably or have they surprised you?
Look, I mean, Magnificent Seven have definitely been down.
Year to date, we have some of the worst performing stocks on the market.
And even if you look at, for instance, how badly the overall market has done, they've
definitely done worse.
For instance, there's...
a bet was put through you know the all-in podcast those guys uh one of which is now
a the head of ai and crypto on the trump
administration yeah um one of them basically put a bet in the start of the
year on on basically two things firstly it
was i think uh uh the
kind of default swaps basically he thought that uh credit default swaps would go up
in value because you know a risk in the market which turned out to be very well
apparently made a 700 return on that and the other bet he put down was that the
Magnificent Seven would fall to below 30% of the SP500,
which it has done, showing that it's basically below.
where it was as a percentage of the market.
So even though the market's fallen, the Magnificent Seven has fallen significantly
more than that.
Interesting.
I suppose you benefit on the upside, and they outperform, and on the downside, they
underperform.
So you've got to take the rough with the smooth, Viv, which I know you will.
Okay, markets now.
Dollar Rand, 1950, got close to 20 yesterday, and then this morning when I
woke up,
it was 1925.
So it's weakened again.
British pound against the round is 25.28, and the euro round is 21.79.
It's the euro that has been taking the round to the cleaners in the last couple
of weeks, I must say.
Euro dollar is now 1.1170.
I mean, that's a euro that's 2% higher against the greenback.
British pound, 1.2960, and that's a pound that's 1.1%
better against the US dollar.
Look at gold, for goodness sake.
3,158, $143 an ounce higher, or 4.75%.
Unbelievable.
Platinum, it's still in three figures.
It's 938, which is up 1.6%, and Palladian, 903,
which is up 1%, up, but really just an apologetic rally to me.
Okay, let's have a look at some other commodities now, because I know that
copper and things like that, having had a...
Really, really torrid time.
I've done relatively well.
Oil's off again.
West Texas is down a percent to 61.75.
And Brent crude, 64.75.
That's 1.1% weaker.
Let me just refresh my screen.
That's looking suspiciously quiet.
Hold on.
Yeah, I'm completely wrong.
I thought it was.
The West Texas price is down nearly 4%.
to 59.91 and Brent crude 63.27 down 3.4 percent, natural gas down 7 percent,
gasoline down 3.8 percent and so so it goes on.
The S&P 500 futures, eminently watchable, it's updating furiously here,
it's now down 3.2 percent to 5,317 that one.
The US 10-year treasury bond yield It's 4.35%, was below 4.30%.
So also just ticking higher.
The yield there was in the mid 4.40s over the last couple of days.
So that's also recovered somewhat, but also worsened since the best levels this
morning.
You see Bitcoin all over the place.
It was about 7-8% higher earlier on today.
It's now up just under 5% to just under 81,000.
That's about it, really.
I want to have a look at some of the movers on the JSC, which I'd normally get
David to do,
but I'm going to do it because there's been some staggering moves.
Let me just refresh that one as well.
While I'm doing that, have you noticed the volume of the JSC?
The performance is quite frankly the easiest job in the world today.
There's only a couple of fallers in the market at the moment.
And the rise on that thing is basically, you know, sub-1 year.
12 percent effectively, Omni 11 percent almost, you know, Goldfield 9 percent, DRD
9 percent, you know,
Anglo, South, 32, it's all these, you know, miners, gold miners especially,
Subania, you know, like I told you, but the one thing I think is going to change
probably is Sasok, which is up, you know, almost 10 percent.
And you think that's going to succumb to the lower oil price, obviously, yeah.
And the stronger round as well.
Okay, let me have a look at this one.
I'll give you mine.
Alphamin, 17.4% higher.
Sivani mentioned 11.4% to the Good Harmony, 10.5% up.
African Rainbow Minerals, 9.4% higher.
On the downside, we had results out from Life Healthcare today,
but there's normally five of the big stocks on the downside, and I've just been
fiddling with my screen,
and I suddenly realised there's only two down, one of which is Life Healthcare,
down 0.2%.
percent.
And if we have a look now at the indices, I can't remember seeing a day like this,
actually.
I honestly can't remember seeing a day where the percentages are so robust across
the board.
And I would imagine the auction is still going on because I don't know if you've
managed to catch the sort of volume going through the
JSC in the last few days.
It's been 40 billion plus most of the time, which is unheard of outside of
futures closeout.
And...
index rejigging but anyway that's what it's been i'd love to see what it was
today but i don't have a facility i've got the resources up eight and a
quarter percent never seen that before industrials 2.6 percent higher financials
after a bad day a
couple of days ago 4.2 percent up and
what else we got the top 40 index a four and a half percent winner to 79 067 and
they
all share itself 86 thousand and two uh four and a quarter
These are interesting times.
I mean, I'd like them to be a little less interesting in a couple of weeks time.
Otherwise, we'll all be carried out with this one.
But do you see it happening?
Do you see the 90 days, you know, providing some providing some sort of
solace to the market?
Or do you just think it's going to carry on and there'll be various pronouncements
depending on the mood that Trump wakes up with?
90 days.
90 days is pretty much the same amount of time from the time he was elected to now.
Do you know that?
Yeah, it's a long time.
From the inauguration to now.
It's not that far off.
So it's not even three months at the moment.
So it's under 90 days at the moment.
So I do think that, you know, if you look at what the next four years is going to
hold for us.
well like again what you're dealing with is a is a nice and the motivations he has
are not the motivations you will think he has i'm not
so sure he's all about money i think he's basically likes the attention he likes the
the power he likes to have
the ability for when he does whatever he does for like the big people
out there to cover that you know kind of like you know bow before the throat
effectively and i think that's what is driving this more
than uh you know it was uh uh just you know or he's trying to basically fool
around the market he's
supposed to get a few more zeros on his background i do think this is this is a
case where he
really is enjoying with his power out there and the next thing to understand is
that there are actually people in his
administration uh who are you know considered to be trinkish but you know
even crank some philosophy is
worth looking at what their philosophy is there is a belief that look if they can
raise and they're talking about about 700
billion dollars in terms of tariffs per year If they can get that money coming in,
that will give them the ability to go out and drop the income tax for anyone making,
I think, $150,000 a year to zero.
And that's the thing that they've been arguing for.
Now, let me tell you something.
If they can do this,
if they can somehow raise $500-600 billion and even drop the income tax of people
making
$100,000, maybe $150,000, $100,000 to zero,
you're looking at people who are going to be basically petitioning for the third
Trump administration.
I'm not even joking about that.
If he can do this, and I'm saying this is the plan, this is the idea of the
philosophy of the day.
I don't think it will be possible, but I think this is the philosophy he's doing.
And that is the idea behind all this stuff, at least from an economic point of
view.
Firstly, I think he also, like I said, just likes the chaos,
but there are people backing him that are under this belief that they can get...
a few hundred billion dollars, that's 500 to 700 billion dollars,
and 500 to 700 billion dollars would be equivalent to the income raised by the IRS
of people making 150,000 to
100,000 dollars a year.
What a gesture that would be, Viv.
What an incredible gesture, because he always goes on.
He knows a little bit of history because it's plonked in front of him and he's told
to read it.
He said he documented when income tax,
when the funding of the country was suddenly put onto
The man and woman in the street.
And he said, this is wrong.
So you're quite right.
He's looking at it.
I can't see it happening.
The ramifications and the bureaucracy and the untangling that would have to be done.
I just think it's just too much, but it's a lovely idea.
That's the philosophy.
And that is what he's aiming for.
And so I think that from his point of view, it's like, oh, I know the secret to
how this is going to turn out.
It's all going to turn out great if you're not believing me.
So what do you use?
You're a panikin.
Yes, a panikin, yes.
Where did that come from?
I have no idea.
But it was funny as hell.
But a panikin.
And then he explains it as people that are stupid and, like, cowardly or something.
Stupid is another word that was used when describing a panikin.
A panikin, yeah.
But I'd say this is philosophy.
So I don't know if this wasn't enough to get you derailed as this fear.
But if...
He's going to come out and he's going to basically try and do this, I'm pretty
sure, until something stops him.
And the thing that stops him might be the bond market.
But the bond market, I don't know if you've seen the behaviour, I know you
follow it a lot, has been extremely weird, right?
Yeah, it's completely said, okay, all our relationships that you got used to over
the decades, out the window.
Yeah, but you see the move, it went first initially when the stuff came out, like,
you know, a few days ago.
It went down from about, say...
30 so 1440 down to about under four yes and then a couple days ago it started
rallying again now it's back to
about 14 uh so 4.3 basically 4.35 so pretty much what it was before and again
no this is again to
understand this
is also a belief that these people have they say if they cut a percent of the us
uh interest rate okay that is equivalent to about 300 billion dollars a year in uh
savings in terms of interest
payments Yes, servicing debt, in other words.
Yeah, and again, if you cut the interest rate for the US down to, like, say, from
four to maybe three,
which is not that far away from where it was just a little while ago.
Again, this is...
all money that they are saving and could theoretically pump back into these these
these these these uh these lower income people
and look at like i said this kind of stuff if it does do it i'm going to say this is
one of those like just chess moves
but if you want to see it and you see if it does come through uh
forget about the midterms he will you would have a red sweep across the entire
board next year if next year no american below 150
000 or even 100 000 paid income tax you know $70,000, I think, is above the
minimum wage,
above the median income in the US.
So if you have even like $100,000 is quite a high number.
So if you can cut a significant chunk of the people below the median of their
income tax,
then I would almost certainly guarantee a red wave.
Again, assuming the world doesn't adjust in a way, because this is not a case of
you can just do what you want to do.
The world won't react.
Right now, we are seeing reactions from the Chinese and from the Europeans.
But, like I said, there is a plan.
I don't know if it's going to be successful, but it is a very brave, very
audacious plan, if you see that.
Yeah, you don't associate Trump with plans, but maybe you're right this time.
Maybe he said, this is what I want, and he hands it over to experts.
He's not prone to do that.
But maybe this time he will.
Maybe he's mellowing.
No, don't be silly, Lindsay.
That's a very, very stupid thing to say.
Viv, thank you very much for your time this evening.
And we'll speak again next Thursday.
Who knows where the S&P will be?
Actually, let's have a little bet here.
I've got my S&P futures here now, Vivian, at 5,000.
I've got the futures at 5,330.
So you've got 5,000 what on the spot?
On the spot, 5,260.
5,260.
Okay, where's it going to be in a week's time?
Closest wins, absolutely nothing except for the pride of the program.
I would think...
basically by next week it would probably be at least 100 points lower than this.
Okay, so you're saying that.
Yeah, I still think 5,000 is a pivotal point.
It was orbiting that just before Trump said the pause and up we went yesterday.
So 5,260, yeah, you say down to 5,060.
I say we'll be 49.50.
So there we go.
We'll check next week.
Viv, thank you very much indeed.
Viv Govender is from Ransuisse in Johannesburg.
And that was the 5 o'clock shadow.
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