Elon Musk’s SpaceX crashes 14%, and R6.2 million MultiChoice streaming crackdown

The South African rand began Thursday, 5 August, on the front foot amid a weaker US dollar as investors hope for the end of the war in Iran. 

Hopes for an end to the conflict have boosted investor risk appetite, prompting some to increase exposure to emerging-market assets, including South African stocks and bonds. 

At 08:00, the rand was trading at R16.34 per dollar, gaining around 1% against the greenback over the last five days of trading. 

Emerging market currencies, more broadly, are a mixed bag, as countries that benefited from elevated oil prices now face financial pressure as prices fall. 

Asian equity markets started the day down, with the Nikkei, Hang Seng, and Shanghai Composite retreating in early trade. 

A potential deal between the United States and Iran to end the conflict in the Middle East has been the main driver of equity markets in recent days. 

Yesterday, Iran said it is in the final stage of reaching an agreement with Oman on a proposed shipping route through the Strait of Hormuz. 

Standard Bank economist Shireen Darmalingam said this is an important step towards reopening the strait for global energy supplies. 

Iran also said that negotiations with the United States were progressing well and that a deal would be reached, provided nothing “obstructs the process”. 

As a result, Brent Crude oil prices continued their fall. Oil is trading down 0.3% on Thursday morning at $79.20. 

Much of the key data coming out today will be from Europe, with June retail sales for the bloc being released. 

This will provide an indication of how elevated oil prices and inflation affected consumer demand in the world’s most lucrative trading area. 

In the United States, there remains significant pressure on the Federal Reserve to raise interest rates as inflation remains well above its target. 

Minneapolis Fed President Neel Kashkari said the Federal Reserve should begin gradually raising interest rates to avoid the need for more aggressive tightening later.

San Francisco Fed President Mary Daly echoed this warning, saying inflation may prove more persistent than expected. She argued for a swift hike in interest rates. 

This can explain slight rand weakness at the start of trade on Thursday, as rising rates in the United States will boost the dollar. 

Locally, electricity production and consumption data for June will be released. Production decreased by 9% year-on-year in May, and consumption fell by 4.3%. 

Important finance and investing news

End of an era at Google: Google DeepMind CEO Demis Hassabis is stepping down to become the division’s chairman as the AI lab shakes up its leadership. Google’s chief scientist, Jeff Dean, is leaving to start his own company after leading the firm’s research efforts for 27 years. Shares in Google-parent Alphabet fell on the news. [Semafor]

Illegal MultiChoice streaming crackdown: The NPA has frozen R6.2 million in proceeds from the illegal distribution of copyrighted MultiChoice content in the Eastern Cape. Investigators identified more than 104,000 MultiChoice-related transactions. [EWN]

Trump selling access to his tweets: US President Donald Trump is selling early access to his posts on Truth Social for $100,000 a month, mainly to hedge funds and traders looking to profit from early access to market-moving information. [Semafor]

Glencore backs the JSE: Commodity-trading giant Glencore has recommitted itself to the JSE after speculation of an additional listing in Australia would see it leave the South African bourse. South African-born CEO Gary Nagle said South Africa has a deep pool of capital and mining expertise that keeps it attractive to Glencore and other mining companies. [BusinessDay] 

SpaceX crashes on huge AI bill: Shares in Elon Musk’s SpaceX fell 14% after the company’s first earnings call, as investors question its $18 billion capex bill. Investors are increasingly concerned that there might not be enough value created in the future to justify this spending. [Wall Street Journal]