Weekly Roundup 2022-07-29

Author: Danyaal Munshi

Weekly Roundup 2022-07-29

Lunar Capital Weekly Roundup

Index / Fund / RateStart of YearLast weekThis Week% change YTD
JSE ALSI73 72368 07068 934-6.50%
NASDAQ Composite15 83311 83412 391-21.74%
S&P 5004 7973 9614 130-13.90%
Prime Lending Rate7.25%9%9.00%24.14%
Lunar BCI WW Flexible Fund165.68148.08145.24-12.34%
USD/ZAR15.9616.8516.533.57%
EUR/ZAR17.9517.2117.00-5.29%
Brent Crude77.86103.71103.5933.05%

Source: iress

Company and Market News

Last week, many of the big US companies released their quarterly results for the period. Overall, the companies released positive results compared to what the market was expecting. This resulted in the Nasdaq and the S&P 500 increasing by over 4% during the week. The major companies that released their results were: Alphabet, Amazon, Apple, Meta, Microsoft and Qualcomm.

Earnings this quarter were better than expected given the inflation and recessionary outlook. However, at Lunar Capital, we think that the next quarter’s earnings season will be more significant indicator with regards to the outlook of the economy. The economy would have been through a longer period of increased interest rates. Consumers would then be paying higher interest on their mortgages, for example, for a longer period; and thus, would have less discretionary spending. This arguably would be felt in the economy as a whole, potentially reducing the earnings of companies.

Below is a table showing some of the financial indicators of companies that released their results.

CompanyMarket Cap @ 29 July 2022 ($bn)12m Earnings Change (%)PE Ratio @ 29 July 2022ROCE
Alphabet1 51914.44%21.7224.41%
Amazon1 375-60.57%121.524.17%
Apple2 63014.78%23.0548.26%
Meta42815.79%13.1930.57%
Microsoft2 09518.72%29.0926.96%
Qualcomm16339.72%12.8636.55%

 

Disclosure: Alphabet, Amazon, Microsoft, Qualcomm, and Berkshire Hathaway (which has a significant holding in Apple) is held in the Lunar BCI Worldwide Flexible Fund.

Read our full Disclosure statement: https://lunarcapital.co.za/disclosures/

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The Lunar BCI Worldwide Flexible Fund Fact Sheet together with our Disclaimers can be read here.

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