Finimize - 📈 The ECB finally hikes rates

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📈 Love ’em or hate ’em, interest rate hikes are here to stay – until, uh, they’re not. Join TradeStation Securities’ David Russell for How To React No Matter What The Fed Throws At You on Monday, and get prepared for the US central bank’s next big meeting this week. Grab your free ticket

Today's big stories

Amazon announced it’s buying healthcare provider One Medical
The weak euro is going to turn a choice few stocks into much stronger investments – Read Now
Hyundai reported its best quarterly profit in eight years

Doctor’s Orders

What’s Going On Here?

Amazon announced on Thursday that it’s agreed to buy healthcare provider One Medical for nearly $4 billion.

What Does This Mean?

Amazon’s been moving into the healthcare space for a while now, having launched – among other things – an online drug store following a $1 billion acquisition of mail-order pharmacy PillPack in 2018. And it continued down that path on Thursday, announcing that it’d be buying One Medical for $18 a share – around 75% more than it was worth before the deal was announced. The move gives Amazon a lot to work with: One Medical offers round-the-clock digital health services to nearly 800,000 fee-paying members, while its 188 offices across 25 markets gives it an expansive physical presence too. The ecommerce giant, for its part, said its goals were noble: it’s planning to use the company to make healthcare more affordable and accessible for everyone.

Why Should I Care?

For markets: Saving patients kills companies.
Amazon’s announcement doesn’t bode well for Walgreens Boots Alliance and CVS Health, both of which have been adding primary care services to their stores recently. Another competitor in the space is never good news, let alone when that competitor has the sheer size and staying power to cut prices, invest heavily in the product, and dominate the market. And since even trying to compete could harm profits even more, investors sent both companies’ stocks down after the news.

Zooming out: The ECB stops fighting it.
No self-serving American would turn up their noses at cheaper healthcare right now, not while they’re being squeezed by rising prices and interest rates. That’s a double whammy Europeans are about to become very familiar with: the European Central Bank increased rates by 0.5% on Thursday – its first hike in 11 years, and the biggest since 2000. There could be more to come too, with the central bank warning that more hikes will be needed in the next few months if it’s going to get a handle on inflation.

You might also like: The ECB’s interest rate hikes are only half the equation.

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Analyst Take

How To Transform A Weak Euro Into A Strong Investment

Carl Hazeley, Analyst

The euro has slid 10% against the US dollar this year.

That brought the two currencies level for the first time in 20 years last week, which needn’t actually be such a bad thing for Europe’s stocks.

In fact, Goldman Sachs estimates that every 10% fall in the euro versus the dollar adds about 2.5 percentage points to European company earnings.

But there are some that benefit from the situation much more than others, and they all tend to share one key characteristic.

So that’s today’s Insight: why a weak euro is no bad thing, and the winners and losers of the weak euro.

Read or listen to the Insight here

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