With the Rand hitting its best level in a year and gold at historic highs, there was some positive sentiment in the markets early this week, despite some poor business performances – including Sasol.

But we’re eyeing crypto pretty closely as BTC rallies and Ethereum holds steady, largely due to in- and outflows in their ETFs.

Here’s what you need to know…

Shining some light on 🔦 

• ETF flows and impacts on BTC & ETH prices.

• $1M gold bars, Sasol’s tough year & Coronation’s special dividend.

• Stock update: Higgo’s Top 10 stock picks for 2024

• Earnings calendar: Who’s reporting on revenue, when

• Your independence formula: How to escape the rat race.

THE SPOTLIGHT

Market Pulse: ETF Flows Shaping BTC & ETH Movements 

Bitcoin’s price has surged by 6% recently, breaking past the $61’000 mark after a brief slump a few weeks back saw investors rushing in to buy in below the $60k level. And the momentum has continued, sparking anticipation that it could continue in the coming weeks.

Here’s what you need to know about recent movements in the crypto space…

Bitcoin Rallies (But With A Crucial Ceiling)

The thing to watch with BTC is what happens when the price reaches its resistance level of $62’500, a crucial ceiling that analysts say it will either break through and surge close to or past its record high of $73k or, if it fails to break through, could see it stabilise or even recede.

For now, the momentum is very bullish as strong ETF inflows buoy BTC – BlackRock’s IBIT ETF (of which Goldman Sachs holds a fair share), for example, recently attracted $92.7 million in inflows, marking the largest since early August. And it certainly looks like the ETF demand is outpacing the post-halving new Bitcoin supply, giving it a very bullish medium-to-long-term outlook.

The same can’t be said for Ethereum right now though…

Ethereum Holding Steady

In contrast, Ethereum has been facing more challenges. While its price has shown some stability, trading around $2,600 for a while, its ETFs are experiencing continuing net outflows, with recent data showing a $13.5 million outflow. 

Grayscale’s ETHE ETF has been the hardest hit, with total outflows now reaching $2.4 billion.  It’s made investors more cautious about Ethereum's short-term prospects, and unless we see a reversal in ETF outflows, the price could struggle to make significant gains.

Beyond the Short Term

All that said, we shouldn’t discount that even BTC remains vulnerable to changing market sentiment – any negative news, regulatory actions, or broader market sell-offs could impact its rally.

Similarly, Ethereum tends to follow Bitcoin’s price movements, but with a bit of a delay, so we might see surges in the future, especially if BTC breaks $62k. ETH also tends to rally when they have major network upgrades or developments, and it looks like the Pectra upgrade could come in early 2025.

Note: This is not financial advice; it is merely observations. For personalised financial advice, you can book to speak to a financial advisor here (powered by a registered FSP: No. 51310).

STOCKS AND ALL

💰 Gold Bars Hit $1 Million Milestone: For the first time in history, a standard 12.5-kilogram gold bar is now worth over $1 million, driven by gold's spot price reaching an all-time high of $2,500 per troy ounce, indicating strong demand.

💼 Master Drilling Earnings Pressure: Master Drilling Group announced that its headline earnings per share (HEPS) for the first half of 2024 are expected to range from a 1.9% decrease to an 18.1% increase compared to last year. But the company’s EPS could see a significant drop of up to 96.5%, due to impairment losses on equipment and uncertainties in commodity prices, when it publishes results on 27 August.

💸 Coronation Special Dividend: Coronation Fund Managers announced a special dividend of 153 cents per share following a victory against SARS, saving them R794 million. At the same time, the asset manager reduced its stake in Meta Platforms by 5.4% during Q2, reflecting a strategic shift in its portfolio amidst this financial windfall.

📉 Sasol’s Tough Year: Sasol reported a massive R44 billion loss for FY24, with a 66% plunge in headline earnings per share, largely due to a R75 billion impairment amid weak chemical prices. The petrochemical giant is now reviewing its underperforming assets, with potential sales or closures on the table as it seeks to stabilise its operations.

💼 Brookfield’s Share Buyback Plan: Brookfield Corporation has renewed its share buyback program (repurchase up to 10% of its outstanding Class A Preference Shares), signalling confidence in its market value and ability to enhance shareholder returns by acquiring undervalued shares.

UPCOMING EARNINGS REPORTS

These companies are expected to deliver earnings reports in the next few weeks:

21 August 2024

• Curro Holdings Ltd 

• Snowflake 

27 August 2024

• Master Drilling Group Ltd

28 August 2024

• Bid Corp

• CrowdStrike

• Nvidia

29 August 2024

• Impala Platinum

WEALTH HACKER’S KIT

A Plan to Escape the Rat Race

Feeling trapped in a never-ending cycle of work and expenses? 

You’re not alone. The key to gaining independence is understanding and working toward your Financial Independence (FI) number. 

Here's how you can calculate it and start moving toward financial freedom…

What is Financial Independence? 

Financial independence means having enough income-generating assets to cover your living expenses without relying on a traditional 9-to-5 job. 

This could come from dividends, rental income, or a business. Once you’re financially independent, you can pursue your passions and hobbies, or simply enjoy life on your terms.

How to Achieve Financial Independence 

Start by calculating your FI number using the 4% rule. This rule suggests you can withdraw 4% of your investments each year, adjusted for inflation, without depleting your savings for at least 30 years.

Calculating Your FI Number

1. Know your annual expenses: Calculate your yearly expenses. For example, if you spend R20,000 per month, that’s R240,000 annually.

2. Apply the 4% rule: Multiply your annual expenses by 25. In this case, R240,000 x 25 = R6 million. This is your fully funded FI number.

3. Reduce with passive income: If you have passive income sources like rental properties or a side business, subtract these from your expenses. If you earn R9,000 monthly from these sources, you’ll only need R11,000 from your investment portfolio. Using the 4% rule reduces your FI number to R3.3 million — a significant decrease from R6 million.

Now, you can work on building additional income streams to gradually get closer to your FI number, reduce your dependence on a traditional job, and steer you toward financial independence.

THE PEOPLE HAVE SPOKEN

We asked which area of retail and apparel you think will grow in the next 5 years, and D2C’s the one to look out for…

🟨⬜️⬜️⬜️⬜️⬜️ 👟 Athletic Footwear & Apparel (14%)

🟩🟩🟩🟩🟩🟩 🛒 Direct-to-Consumer (D2C) Brands (58%)

🟨⬜️⬜️⬜️⬜️⬜️ 🌱 Sustainable Fashion (14%)

🟨⬜️⬜️⬜️⬜️⬜️ 📦 E-commerce Giants (14%)

See you next week Wednesday.