Finimize - 👀 Morgan Stanley’s eyeing metal

Hi Reader, here's what you need to know for February 13th in 3:09 minutes.

❤️ Valentine’s Day might be all about celebrating your one true love, but you can be a bit more experimental when it comes to investing. Join IG’s Martin Harris for How To Build A Smart Portfolio on February 14th, and discover the benefits of keeping your options open. Get your free ticket now

Today's big stories

The UK avoided a recession by the skin of its teeth last quarter
China could be putting a new shine on iron ore and aluminum – Read Now
PayPal’s disappointing results left investors with a pretty painful headache

Near Miss

What’s Going On Here?

Data released on Friday revealed that the UK economy had a brush with disaster, narrowly escaping a recession last year.

What Does This Mean?

Economists were biting their nails as this report approached: after all, the previous quarter’s economic shrinkage meant the slightest stumble would catapult Britain into a technical recession, with the economy contracting for two straight quarters. But the UK dodged that fate by a hair’s breadth, scraping by with zero growth last quarter thanks to a bonus bank holiday and some extra World Cup spending. That said, the UK could be in for even more trouble if the tail end of the period is anything to go by: December fell short of even the gloomiest predictions, with output dropping 0.5% as folk economized and strikes walloped the country.

Why Should I Care?

The bigger picture: Long haul.
This result means the UK economy is still down 0.8% from where it was at the same time in 2019 – making it the only G7 economy that hasn't yet bounced back from the pandemic. To put that in context, the US has grown an impressive 5.1% in the meantime, and even the war-plagued eurozone has managed a decent 2.4%. But the Bank of England says the UK’s in for a marathon before it gets back to where it was: with energy prices and borrowing costs set to shrink the economy this year, the central bank thinks it’ll be 2026 before the economy’s in pre-pandemic shape (tweet this).

For markets: FTSE’s flying.
The British economy might be staggering, but the FTSE 100 – which tracks the country’s 100 biggest stocks – strode ahead last week and smashed its own record highs. It's not hard to guess why: 80% of the revenue that FTSE 100 companies make comes from abroad – so when the pound takes a nosedive, the exchange rate works in their favor. Plus, financial, commodity, and energy firms make up a big chunk of the index, and they’re all cruising high right now.

You might also like: Morgan Stanley says the UK could deliver a huge surprise in 2023.

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Analyst Take

These Two Assets May Gleam Especially Brightly With China’s Reopening

By Luke Suddards, Analyst

In terms of market-moving events, they don’t get much bigger than what’s going on in China right now.

The government’s decisions to reverse its Covid restrictions and to inject its moribund property market with fresh stimulus are huge.

It means a boost for stocks, sure, but also for the stuff right under your feet. And Morgan Stanley believes that two commodities – iron ore and aluminum – are in prime position to benefit.

That’s today’s Insight: why China may put a new shine on iron ore and aluminum.

Read or listen to the Insight here

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Fall in love with diversification all over again

You might’ve been lucky enough to find your one true love, perfect in every way.

But when it comes to investing, you might want to stay in the dating pool a little while longer: see, no one asset can give you everything you want, so you’ll need to mix it up a bit.

Yup, we’re talking polygamy: a diversified portfolio could get you through the tough times, and build you up during the good ones. And this Valentine’s, IG is walking you through your options.

You’ll find out the pros and cons of different asset classes, and when they tend to thrive and fail. By the end of the session, you’ll know which ones could make your portfolio’s heart flutter.

Join IG’s Martin Harris online on February 14th, and find out everything you need to know about diversification. (It’s at 1pm UK time, so you won’t need to cancel that romantic dinner for two.)

Register Here

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