Curious about global stocks? Our latest work in Magic Markets Premium is on Procter & Gamble. Is this company as defensive as people like to think? Find out by subscribing to our research platform>>>

Truworths delivers a nice surprise

If Mr Price had you feeling depressed about our economy, the other clothing retailers have certainly done their best to lighten the mood (and their stores with backup energy). Truworths came out swinging with a highly presentable growth number, although volumes seem to have dipped slightly for the 26-week period.

I must highlight that the Mr Price update covered a shorter period, one that was heavily impacted by load shedding. Still, the gap between Mr Price and its competitors seems to be substantial.

In addition to the details on Truworths, you'll find updates on AVI, MiX Telematics and OUTsurance in this morning's edition of Ghost Bites>>>

For a weekly update that you can listen to while you drive, jog or just take a break on the couch, remember to add Ghost Bites to your podcast playlist. Brought to you by Mazars, the latest episode covers Nampak, Steinhoff, Richemont, BHP, Woolworths, Mr Price and Spar. You can find it here>>>

Tesla starts chasing volumes

With recent price cuts, Tesla is clearly prioritising volume growth over margins. With so much investment in capacity, that probably makes sense. Nothing kills a manufacturing business quite like excess capacity in its manufacturing operations, leading to overheads that are far too high per unit sold.

In the latest quarter, Tesla managed to beat revenue expectations and that's before the impact of price cuts is felt. Musk is talking about strong demand for the cars, so that did wonders for investor sentiment. Gross margin was the lowest it has been in over a year, again before the effect of the price cuts. Like in every other producer of any consumer good, the difference between success and failure lies in finding the optimal mix of price and volume growth.

Tesla has been on a ripper of a rally thus far in 2023, up 47% in just a few weeks! This is the danger of short positions unfortunately. There are so many sensible reasons to be short Tesla, yet it would've killed you this month.

A surprise from the SARB

Count your lucky stars if you have loads of debt: the SARB only hiked by 25 basis points, not 50 basis points as was widely expected. TreasuryONE notes commentary from the SARB around revised growth expectations, sadly in the wrong direction for South Africa. With the impact of load shedding, growth for 2023 is expected to be just 0.3%, down from the previous forecast of 1.2%.

Inflation is expected to average 5.4% in 2023, back within the SARB's target band. There are still upside risks to the inflation outlook, with food and energy as the likely culprits.

Meanwhile, the US economy is doing just fine thanks. GDP growth came in above estimates at 2.9%, reducing the potential for rate cuts in 2023. The Fed is expected to only hike by 25 basis points next week, possibly taking us to the top of the hiking cycle.

The rand is still trading in the R16.80 to R17.30 range and seems to be comfortable there for now.

Don't fall behind on Magic Markets

With a new episode of Magic Markets already in the wild and due to be released in Ghost Mail on Monday, make sure you've listened to Episode 108 with Travis Robson of Trive South Africa. We talked about the stockbroking environment in South Africa and why Trive has entered the market. Find it here>>>

With that, I wish you a lovely weekend!