Finimize - ⚽️ Sports could save the UK economy

Hi Reader, here's what you need to know for January 16th in 3:14 minutes.

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Today's big stories

Banks beat expectations, but investors were left unimpressed
Amazon’s AWS announced a new partnership, and it’s a big deal for Avalanche – Read Now
The UK economy managed to grow in November, thanks to... sports fans

Cross Your Fingers

What’s Going On Here?

A legend-worthy huddle of big banks reported earnings on Friday, and their results sent an initial shiver down investors’ spines.

What Does This Mean?

When Citigroup, JPMorgan (JPM), Wells Fargo, and Bank of America released their results on Friday, their profit stats seemed to buck the bad-luck trend of Friday the 13th. But dig into the guts of the reports, and you’ll find there’s more to the tale: the banks poured more cash into their “just in case” reserves than expected, and the fees they made from investment banking dropped off too. Overall, they seemed wary of the real possibility of a deteriorating economy, with JPM’s CEO cautioning that we still don’t know the “ultimate effect of the headwinds coming”. Investors heeded the warning, and left bank stocks and US indexes to retreat in their wake.

Why Should I Care?

For the economy: Big banks, big warnings.
Even if you don’t care for fat cat news, it’s still worth keeping an eye on big banks: their earnings often indicate how the economy’s doing as a whole, and can even offer hints about the future. See, banks make money from a whole range of businesses and individual folk, so they tend to notice changes in sectors early on. So if banks’ voices wavered when they delivered their latest insights, you can understand why investors might’ve got trembling hands.

For markets: Watch out for the rally killer.
Those big bank results could set the scene for the rest of earnings season – so it’s not ideal that the tone is a far cry from “fairytale” right now. Stocks, after all, have had a sudden pep in their step, mainly thanks to falling inflation and an unexpectedly strong economic response to rising rates. But if earnings end up haunting markets, that rally could soon be scared away.

You might also like: How to invest tax efficiently in four easy steps.

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Analyst Take

Amazon Is Doing Business With This Blockchain. Should You?

By Jonathan Hobbs, Analyst

One of Ethereum’s top rivals had some big news on Wednesday: Ava Labs, the team behind the Avalanche blockchain, has partnered with Amazon Web Services, the world’s leading cloud computing provider.

As you’d expect, crypto investors liked the announcement, with Avalanche’s AVAX token pumping 25% on the day.

But before you YOLO in with the rest of them, let’s take a step back and ponder why it might be positive for Avalanche’s long-term prospects.

That’s today’s Insight: what the AWS partnership could mean for Avalanche.

Read or listen to the Insight here

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