💳 Paypal lost investors and gained friends

Hi Reader, here's what you need to know for November 7th in 3:12 minutes.

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Today's big stories

The US added more jobs than expected again last month
Here are three reasons why Ethereum could be bigger than Bitcoin – Read Now
PayPal's results update made investors head for the exit, despite its flashy new partnership

Perspective Matters

What’s Going On Here?

Data out on Friday showed the US added more jobs than expected last month, but there are always two sides to every story.

What Does This Mean?

The Federal Reserve (the Fed) hiked interest rates by 0.75 percentage points for the fourth-straight time last week, describing the jobs market as “overheated” at the time. And Friday’s jobs report didn’t prove it wrong: the US added 261,000 jobs last month, trumping the 193,000 economists expected (tweet this). And because the competition for jobs has been fierce, companies bumped their average hourly earnings up a higher-than-expected 0.4% from September to attract workers. That’ll fire up blazing inflation, not least because those businesses will likely hike their prices to make up the difference. But there was a whisper of hope: that gain was the slowest uptick since December 2020, and the unemployment rate ticked up to 3.7% after hitting a 50-year low in September.

Why Should I Care?

For markets: Gird your loins.
There are cracks showing up all over the job market, with even industry titans like Amazon and Apple announcing that they’re halting hiring for corporate roles. Others are taking an outright ax to the problem: Lyft and Stripe are gearing up to cut 13% and 14% of their workforces respectively – and that’s only the start. Now, the Fed has said it’s hoping for a drop in job openings rather than job losses, but the central bank – currently on its most aggressive rate-hiking campaign since the 1980s – will take whatever it can get.

The bigger picture: Lucky for some.
The Fed will be cursing the resilient jobs market for making it nearly impossible to calm swelling wages and inflation, but the US government has a different view. See, it’s repeatedly touted the strong jobs market as an indicator of a robust economy, so Friday’s data – the last major economic report to drop before key midterm elections next week – will only put more wind in its campaigning sails.

You might also like: Here’s where Blackstone sees opportunities now.

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Analyst Take

Bitcoin Is King Now, But Ethereum Has Its Eye On The Crown

By Jonathan Hobbs, Analyst

With the crypto market rallying, you might be wondering whether bitcoin is still the best long-term investment – or whether ether will give you more bang for your buck.

And look, bitcoin’s great: its market dominance to this point cannot be disputed.

But I’ve got three reasons why ether could be poised not only to grow more, but to even overtake the OG crypto some day.

That’s today’s Insight: is Ethereum destined to be bigger than Bitcoin?

Read or listen to the Insight here

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PayPal’s Pay Pal

What’s Going On Here?

Paypal's results update didn't quite hit the target late last week, but its blossoming tech friendship might bode well for the future.

What Does This Mean?

You don’t have to be a genius to guess that companies like PayPal would suffer when spending’s on the decline, and this time, common sense is on the money: the company processed a disappointing 14% more payments by value last quarter versus the same time the year before. In fairness, PayPal's focus on marketing towards existing customers was worth the work, with active accounts making 13% more transactions, helping revenue and profit beat analysts' expectations. But that’s where the good news ends: the firm warned it wasn’t hopeful about US ecommerce this festive season, and slashed its full-year outlook. So although PayPal vowed to cut costs through layoffs and office closures, unimpressed investors still sent shares plunging 11% in the wake of the news.

Why Should I Care?

Zooming in: The Apple of its eye.
PayPal did have one trick up its sleeve to keep investors engaged: it announced a deal with Apple that’ll see each firm integrate the other’s offerings into its own payment systems. That’s a big deal: it means that debit cards issued by PayPal and its offshoot Venmo will now be accepted in Apple Wallet. That’ll let shoppers tap away anywhere Apple Pay is accepted – potentially a lucrative deal for PayPal, given that Apple's service accounts for an estimated 5% of all card payments worldwide.

The bigger picture: Misery loves company.
PayPal’s not the only one anticipating a blue Christmas this festive season: Mastercard also forecast weaker-than-expected growth for this quarter, as did PayPal’s old bedfellow eBay. Even Amazon, a retail industry bellwether, isn’t too optimistic, as hard-hit consumers cut back on spending. In fact, the National Retail Federation thinks sales in November and December will only rise between 6 and 8% from last year – a decline in real terms when you factor in inflation.

You might also like: How you can work out what PayPal’s really worth.

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💬 Quote of the day

“Take away the miseries and you take away some folks’ reason for living.”

– Toni Cade Bambara (an American writer, civil-rights activist, and teacher)

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TODAY'S TRENDING TOPIC

The last earnings season was a rough one for Big Tech – well, almost all of Big Tech. Apple managed to buck the tumbling trend, and things are only getting better for the industry goliath: Apple is now worth more than Google, Amazon, and Meta combined.

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🌍 Finimize Live

🥳 Coming Up This Week…

All events in UK time.

💰 Strategies For Market Volatility: 1pm, November 8th
✨ How To Profit From Special Situations As A Value Investor: 5pm, November 9th
🔧 Tools Value Investors Use For Turbulent Times: 6pm, November 10th
🔥 How To Build Better Financial Habits In Your 20s & 30s: 3pm, November 11th

👀 And After That…

♻️ How To Build An Eco-Friendly Crypto Portfolio: 1pm, November 14th
💥 How To Diversify During High Inflation: 6pm, November 14th
🐻 How To Survive A Crypto Bear Market: 7pm, November 15th
✅ How To Successfully Invest In Dividend Stocks: 6pm, November 22nd
🚀 2023 Outlook: What’s Next For Crypto?: 6.30pm, November 23rd (in person, London)
🌍 Finding Opportunities In A Challenging Market With BlackRock: 1pm, December 2nd
🇦🇪 The Modern Investor Opening Party In Dubai: 6pm, December 6th
🎉 Modern Investor Summit: 12pm, December 6th – 7th

🎯 On Our Radar

Rise of the machines. It’s getting harder and harder to understand AI.
Eating humble pie. This musical genius knew how to apologize.
Winter-ready skin. It’s high time you started hydrating.
Dr Dolittle, for real. This cutting-edge tech is helping us talk to animals.
Sappho, so good. The ancient world adored this homoerotic poet.

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💳 Paypal lost investors and gained friends

Today's big stories

Perspective Matters

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Bitcoin Is King Now, But Ethereum Has Its Eye On The Crown

Unlock tomorrow’s biggest business opportunities

PayPal’s Pay Pal

What’s Going On Here?

What Does This Mean?

Why Should I Care?

🥳 Coming Up This Week…

👀 And After That…

Older messages

🐦 Musk's Elon-gating the drama

🏡 Investors take an Airbnb break

🚗 Toyota's breaking down

⛏ Tesla's digging for gold

⛏ Tesla's digging for gold

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