Tim Cook Out, Tariff Refunds In, Markets Back At Highs

Episode Summary

US markets are at all-time highs even as $166 billion in Trump tariff refunds start processing — a mess that will boost retailer earnings but leave consumers out of pocket. Tim Cook is stepping down at Apple, Amazon is buying Globalstar for $11.57 billion to build a Starlink rival, and Netflix delivered lumpy results as Reed Hastings exits the board. Simon also breaks down the Fed Chair nomination battle, the WTI oil anniversary, and why market recoveries keep getting faster.

What We Cover 🗂️

🍎 Tim Cook out at Apple — John Ternus (VP Hardware Engineering) takes over; Simon’s verdict on a stock he’s never owned
💸 $166 billion tariff refund chaos — 330,000 importers, 53 million shipments, and consumers who paid more won’t get a cent back
📈 US markets at all-time highs — S&P above 7,000, Nasdaq on a 13-day run; why markets shrug off wars faster than ever
🇿🇦 SA CPI & fuel price — Expecting 3.8% Wednesday; Brent in the mid-90s and rand at R16.30–16.40 points to a fuel price decrease in May
🏛️ Fed Chair nomination battle — Kevin Warsh’s Senate hearing Tuesday evening; Republican Senator Tom Tillis blocking the vote; what happens if Powell isn’t replaced by 15 May
🌍 Fun facts — Taiwan overtakes the UK as the world’s 7th largest market (thanks TSMC); Mark Mobius passes away at 89; the 6th anniversary of WTI oil going negative (-$37.63 on 20 April 2020)
🛰️ Amazon buys Globalstar for $11.57 billion — Building out Amazon Leo (low Earth orbit); what it could mean for Amazon Prime
🎬 Netflix results — $2.8 billion Warner break fee in the numbers; Reed Hastings stepping back from board; is Netflix a mature business now?

Key Takeaways 💡

The tariff refund circus will create a one-time earnings bump for US retailers in Q2/Q3 — but consumers who paid inflated prices at the till get nothing back. Watch for the boost in Walmart, Target and similar results.
Market recoveries are compressing. The 2008–09 cycle took 18+ months to bottom and years to recover. This cycle turned in months. Simon’s view: when panic hits, wait a few days then buy.
Apple is expensive, full stop. Forward PE of 31.7 against a 10-year mean of 25.5, with EPS growth of maybe 10–15%. The analyst consensus says “buy” — Simon has always said “too rich for my blood” and he’s sticking to that.
Amazon is building an ecosystem play, not just a satellite deal. Globalstar + Amazon Leo + Amazon Prime could eventually mean global data and calls bundled into a Prime subscription. Compare this to how AWS looked in its early days.
Netflix is solid but the growth story is maturing. Forward PE of 28 vs a 5-year mean of 43. The question of who’s left to subscribe is real. It’s not going away — but a 10x return from here isn’t in the cards.

Stocks & Markets Mentioned 📋

AAPL — Apple — Tim Cook stepping down end of August/September; John Ternus (VP Hardware Engineering) named successor; forward PE 31.7, 10yr mean 25.5, avg target ~$300, closed $273
AMZN — Amazon — Acquiring Globalstar for $11.57B to expand Amazon Leo satellite network; forward PE ~30; avg analyst target $282, stock ~$250; 48 buys, 14 strong buys
GSAT — Globalstar — Being acquired by Amazon; current supplier of satellite comms to remote/industrial operators
NFLX — Netflix — Q1 results included $2.8B Warner break fee; Reed Hastings stepping down from board; forward PE 28 (5yr mean 43); avg target $115, stock $94; 29 buys, 9 strong buys, 1 strong sell
META — Meta Platforms — Mentioned in context of scammers running fake Simon Brown ads on Facebook, Instagram and WhatsApp; Meta charges scammers more per internal discovery
WMT — Walmart — Used as example of retailer that will pocket tariff refunds consumers won’t see
TSMC — Taiwan Semiconductor — Driving Taiwan’s rise to 7th largest market globally, overtaking the UK
GOOGL/YouTube — Cited as Netflix’s biggest competitor; on more screens globally than any other streaming service
DIS* — Disney+ — Named as current streaming service Simon is using
Brent Crude — Mid-$90s; well off the $119.50 peak at war outbreak
WTI (West Texas Intermediate) — Anniversary discussed: -$37.63/barrel on 20 April 2020; physically settled futures, no storage capacity during pandemic
S&P 500 — Above 7,000 at time of recording
NASDAQ — 13 consecutive green days before Monday’s pullback
ZAR (South African Rand) — Trading at R16.30–16.40/$

Simon Brown

* I hold ungeared positions.

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WorldWide Markets Podcast

Wednesdays are all about hard-core investing and trading with Simon Brown’s WorldWide Markets podcast (previously JSE Direct). JSE Direct started life on ClassicFM in July 2008 and became a podcast in 2011. Every week Simon shares his views on the state of global economies, individual shares and events moving markets.

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