Finimize - 🐂 Listen: that might just be a bull

Hi Reader, here's what you need to know for February 1st in 3:09 minutes.

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Today's big stories

Spotify’s losses kept growing last quarter, but investors cut the struggling giant some slack
The latest stock rally might just be the start – Read Now
The IMF sweetened its global growth forecasts, but not everyone’s a winner

Record Scratch

What’s Going On Here?

Music streaming giant Spotify reported on Tuesday that losses swelled to a crescendo last quarter.

What Does This Mean?

Spotify’s the undisputed king of music streaming, but when it comes to actually turning a profit, the titan isn’t quite up to scratch. That means that the firm’s still facing challenges, despite adding an impressive 10 million new subscribers last quarter. See, the company hands a whopping 70% of its revenue over to the owners of the music. And while Spotify has sunk billions into exploratory projects like podcasts, those moves aren’t bearing much fruit, and only seem to be tightening the firm’s already thin margins right now. To top it off, Spotify’s bloated workforce added to its piling costs, and in the end, the firm ran up a $290 million loss last quarter – nearly seven times more than the same time the year before.

Why Should I Care?

The bigger picture: Expect ads.
To be fair, Spotify’s doing its best to turn a profit: just last week the firm announced that it’s cutting its workforce by 6% in a bid to lower costs. That’s not likely to be a true game-changer though, and the real money might just lie in – shock horror – advertising. Remember, Spotify’s got the ear of almost half a billion users, so growing its ad business could bring in some serious dough – as YouTube’s ads do. The firm’s headed in the right direction: ads accounted for a chunky 14% of total revenue last quarter.

For markets: Siren song or a tune that rings true.
Investors rallied behind Spotify's upbeat outlook for subscriber numbers and revenue, and probably liked its efforts to get on track too. They brushed off the loss and sent shares up 10% – but let's not get ahead of ourselves. The stock's still down nearly 70% from its two-year high, and investors won't think twice about jumping ship if Spotify doesn't make good on its promises.

You might also like: Here’s how you can work out what Spotify’s stock is really worth.

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Analyst Take

Stocks Could Be Headed For A New Bull Market

By Russell Burns, Analyst

Inflation and recession risks battered markets in 2022.

But stocks are already punching back this year, with growth and technology ones flexing some serious muscle.

Tesla has rallied 44%, Shopify 44%, Meta 23%, and Amazon 20%.

The question now is whether last year’s risks are truly behind us, and whether we could be headed for a new bull market.

That’s today’s Insight: why this new rally could be the start of something promising.

Read or listen to the Insight here

Good As Gold

What’s Going On Here?

The International Monetary Fund (IMF) brightened its global growth outlook for the first time in a year this week.

What Does This Mean?

The IMF spent much of 2022 crooning a warning song about a coming global recession, but all of a sudden it’s changed its tune. In fairness, China's dropped its zero-Covid policy since the organization's last update, and energy prices in Europe have eased up a tad too. Even US spending’s holding up well – all of which suggests the global economy isn’t as weak and pale-faced as it once seemed. That said, the West’s still taking a back seat in this revised outlook: India and China are expected to make up half of the world’s growth between them, with India pegged to be the fastest-growing big economy. The US and Europe, on the other hand, are expected to make up a measly 10%. All in all, the IMF thinks the global economy will grow 2.9% this year, and accelerate to 3.1% in 2024.

Why Should I Care?

Zooming in: Hard luck, chaps.
The forecast didn’t get brighter for everyone, mind you: the IMF downgraded the UK’s prospects big time, labeling Britain as the only major advanced economy set to contract this year – with even sanction-hit Russia due to outpace it. And as for why, you don’t need to dig any deeper than the country’s shrunken labor force, rising mortgage costs, and planned tax hikes, all of which are dragging on the economy.

The bigger picture: Get hit and keep moving forward.
Right on cue, the eurozone came along and justified the IMF’s optimism, with data out on Tuesday showing the region grew by 0.1% from the third to fourth quarter last year. That means the region’s economy grew in every quarter of 2022, despite facing an energy crisis and a literal war – a fact that’s got folk hoping it’ll sidestep a recession completely.

You might also like: abrdn sees the world on the brink of recession.

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💬 Quote of the day

“I base most of my fashion taste on what doesn’t itch.”

– Gilda Radner (an American actress and comedian)

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👩‍💻 Opportunities For Women In Blockchain 2023: 12.30pm, February 16th
🗞 The Relationship Between News And The Markets: 5pm, February 21st
✍️ What Are Investment DAOs And How Do They Work?: 6pm, February 22nd

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Finimize - 🐂 Listen: that might just be a bull

Today's big stories

Record Scratch

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Stocks Could Be Headed For A New Bull Market

Good As Gold

What’s Going On Here?

What Does This Mean?

Why Should I Care?

🥳 Coming Up Soon…

Older messages

🚗 BYD’s going FTW

🚀 Emerging markets might take off

🚛 The US kept on trucking

🧧 China partied hard

😊 Here’s why Europe’s smiling

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