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A major airline group just made a profit – finally | Brits might be better off renting for now |

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Today's big stories

  1. British Airways-owner IAG made a profit last year for the first time since the pandemic
  2. Chipotle’s futuristic menu comes with a dollop of artificial intelligence – Read Now
  3. Fired-up mortgage costs have made it cheaper to rent than buy in the UK

New Heights

New Heights

What’s Going On Here?

IAG reported on Friday that it finally made a profit last year, but the airline group’s other announcement kept investors grounded.

What Does This Mean?

If you’ve ever scanned for European flights while dreaming of a prosecco-filled summer vacation, you’ll probably recognize some of IAG’s carriers: British Airways, Iberia, and Vueling. Well, IAG’s been flying against a headwind for some time, racking up more than $10 billion in pandemic-induced losses. But now travel-hungry freedom-seekers are booking flights like they’re going out of style, and more business travelers are swapping their shirt-on-top, underpants-on-the-bottom Zoom meeting setups for boardrooms around the globe. IAG, then, made a profit last year after two dismal ones – and with the airline group expecting a full return to pre-pandemic capacity by the end of the year, IAG reckons its profit could almost double in 2023.

Why Should I Care?

For markets: Own the Spanish sky.
 IAG had another announcement: it’s buying up the rest of Spanish airline Air Europa, picking up the deal that was scuppered by the pandemic back in 2020. Now, that might sound like a prime opportunity to nab more market share in the region, but investors aren’t fully sold. See, analysts reckon IAG’s massive debt pile has been weighing on the firm’s share price, and this deal will only make the dent bigger. That might be why IAG’s stock fell on Friday, despite the tip-top results.

The bigger picture: Prepare for a slow ascent.
Mind you, IAG’s tale is hardly an original story: the airline industry took a collective blow of $200 billion in losses over the last three years, but planes all over the world are finally taking off from the tarmac. It’ll take a long time to erase the past, though: the International Air Transport Association predicts carriers will make just shy of $5 billion in profit this year, a mere fraction of the more than $26 billion they made in the heady days of 2019.

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Analyst Take

This Spicy Little Stock’s Got A Recipe For Growth

This Spicy Little Stock’s Got A Recipe For Growth

By Paul Allison, Analyst

You’ve probably stood in line waiting for a burrito at Chipotle, and maybe you spent the time deciding if extra guac is worth it.

Or maybe you’ve tried to figure out how many orders the store fills in a day, what the ingredients cost, and how much employees earn.

A bit of mental arithmetic and you’ve figured out the firm’s profit margins, a vital part of understanding Chipotle’s business model.

And with the chain’s record of innovation and its plans for an artificial intelligence and robotics-driven future, that could be an appetizing prospect.

That’s today’s insight: a deep dive into Chipotle’s stock.

Read or listen to the Insight here


Spring’s come early for the UK

It’s been a long ol’ winter, but there are finally signs of spring in the UK.

And we’re not just talking about the weather: the country’s chaotic mini-budget era seems like a hazy memory, and there finally seems to be a sense of blossoming calm.

Investors certainly seem a bit more upbeat: the UK’s key stock index – the FTSE 100 – just keeps setting fresh record highs, and even crept above the symbolic 8,000-point barrier.

Mind you, there’s no guarantee that the country’s back on its feet – and as always, some investments are more likely to hold up over time than others.

Handy timing, then, that IG has released its top FTSE 100 stock picks for this March.

Find Out More

Your capital is at risk. The value of shares, ETFs and ETCs can fall as well as rise, which could mean getting back less than you originally put in.

Lease Please

Lease Please

What’s Going On Here?

Data out on Friday showed it’s now cheaper to rent a home than own one in the UK.

What Does This Mean?

There’s a reason folk scrimp and save for years to buy a home, besides the freedom to paint the walls without agitating a grumpy landlord. For over a decade, reports have shown that owning a home is cheaper than renting for Brits. But that changed last year: the Bank of England started hiking interest rates in a bid to tame rampant inflation, pulling mortgage rates up from the 1% they averaged over the past few years to over 6%. That means the interest component of mortgage payments has doubled in the last couple of years. That matters: according to Capital Economics’s analysis, the average mortgage payment has hit £1,000 ($1,200) for the first time, making renting the cheaper alternative to taking out a new mortgage. That hasn’t been the case for 14 years, and the same analysis suggests Brits will be better off renting until the second half of 2024.

Why Should I Care?

The bigger picture: There’s the rock, and there’s the hard place.
Renting might be the cheaper option, but it’s certainly not cheap. Those ramped-up mortgage payments are forcing would-be buyers to rent for longer, and that’s lighting up rental prices too. And because savers are struggling to reach ever-increasing lending requirements, mortgage approvals have slowed to their lowest level since the first Covid lockdown. House prices have dropped off too, with Oxford Economics predicting they could end up as much as 15% lower than last year’s peak.

Zooming out: Hard as nails.
Brits sure are resilient: data out on Friday showed UK household confidence rebounded by the most in almost two years this February, indicating more optimism about their finances and the economy as a whole. But with plenty of predictions that the country’s economy is headed for one of the longest slumps on record, that hardy disposition will really be tested.

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💬 Quote of the day

“I would never die for my beliefs because I might be wrong.”

– Bertrand Russell (a British mathematician, philosopher, and logician)
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🌍 Finimize Live

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All events in UK time.

💸 How To Pick Winning Exchange-Traded Funds: 5pm, March 7th
🌥 Do Recessions Have A Silver Lining?: 5pm, March 8th
🌎 Three Ways Long-Term Investors Can Act On Climate Change: 12pm, March 21st
🚀 What Will Be The Next Big Thing In Artificial Intelligence?: 1pm, March 22nd

🎯 On Our Radar

  1. NSYNC meets NASA. Lance Bass almost made it to space.
  2. Mother Nature’s a thing of beauty. If you want a healthy glow, put mushrooms on your face.
  3. No, not war. Turns out super pigs are the biggest threat to mankind.
  4. The work update you never asked for. Google Docs is getting a makeover.
  5. Farewell, body hair. Men’s bodies are only getting smoother.
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