📉 Why do some investors think US stocks will fall another 40%?

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Hi Newsletterest, here's what you need to know for April 27th in 3:15 minutes.

😎 Finimized while sunbathing on the terrace in Paris, France (19°C/67°F ☀️)

Today's big stories

Nestlé, the world’s biggest public food company, reported its fastest sales growth in almost five years
Our analysts look at why being too prepared for the future might hold back the economic recovery – Read Now
Industry stalwarts including JCPenney and Lufthansa are bracing for bankruptcy

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Eye Candy

What’s Going On Here?

Nestlé’s first-quarter update gave investors a break from disappointing earnings updates late last week: the Kit Kat maker announced its fastest sales growth in almost five years (tweet this).

What Does This Mean?

You probably won’t be surprised to hear that another consumer staples company has benefited from lockdown-driven stockpiling. But what might surprise you is how sharply the recent trend toward organic products just reversed: turns out consumers who have spent the last few years shunning processed foods suddenly couldn’t get enough of artery-cloggers like Hot Pockets.

It was in part this reversal that helped the world’s biggest listed food company report a higher-than-expected 4% growth in revenue versus the same time last year – and, more importantly, maintain its annual growth forecast.

Why Should I Care?

For markets: Livin’ it large.
Nestlé’s stock rose 3% after its announcement on Friday. Investors were probably well aware of Nestlé’s “defensive” nature – in that consumers tend to buy the company’s products no matter the state of the economy – but they mightn’t have expected the company to stand by its earnings forecast when lots of its coronavirus-shy peers were abandoning theirs. It may be they hadn’t considered Nestlé’s unique advantage in times like these: as the biggest company in its industry, it’s better positioned than its rivals to take the lion’s share of any growth in the market.

The bigger picture: Sacrifices must be made.
Nestlé also revealed on Friday it’s thinking about selling its Chinese peanut milk and canned rice porridge business. If it does, it could help pay for the $500 million program it’s rolling out to support its café and restaurant customers. The program will help small businesses stay afloat by pausing rental fees on coffee machines and giving them more time to pay for products, and could help boost loyalty – and business – when the economy’s back in full swing. That’s all well and good, but where does it leave the Chinese peanut milk enthusiasts?

Spotting opportunity: The five steps to picking the right stocks.

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Don’t Bank On It

What’s Going On Here?

Many Americans were financially unprepared for the present crisis, but now there are worries that being overprepared for the future could hurt the broader economic bounceback…

Get the full story in the Finimize app

3/3

Fright Night

What’s Going On Here?

Something sinister was lurking in JCPenney’s storm drain late last week: the department store chain's in talks with lenders about funding its looming bankruptcy. Take it, JC Penney. Take it.

What Does This Mean?

The long-suffering American retailer has been struggling with the rise of ecommerce and fast fashion for years, and was on shaky ground even before the coronavirus pandemic temporarily forced it to shut its 859 stores. But now JCPenney is talking to its existing banks, as well as potential new ones, about borrowing up to $1 billion. That loan would help the company to keep operating throughout “Chapter 11” bankruptcy proceedings – and hopefully enable it to repay its debts after restructuring.

Similar rumblings were heard across the pond from airline Lufthansa, which has grounded 95% of its flights and admitted earlier this month that it was burning through around $1 million every hour. The German flag carrier followed up late last week with a warning that even if it borrowed more money, it’d run out of cash in weeks unless European governments stepped in to offer support.

Why Should I Care?

For markets: Pinky promise?
Over a decade ago, the US government bailed out its finance industry during the global financial crisis in what it said was a one-off. But faced with another crisis, it’s already agreed to bail out airlines – arguing that the pandemic wasn’t their fault – and is now considering rescuing other industries too, including oil companies. Some analysts reckon other countries will follow with wholesale corporate bailouts of their own soon enough. So much for "one-off"…

Zooming out: Odds on DraftKings.
One company that’s unlikely to need a bailout anytime soon is sports betting firm DraftKings, which on Friday merged with an already publicly listed specialist company so that its shares would be listed on the stock exchange. The lack of live sports is hurting the company, sure, but the rapid growth of esports might give it something to cheer on.

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💬 Quote of the day

“When I was a boy, I was told that anybody could become president. Now I’m beginning to believe it.”

– Clarence Darrow (an American lawyer and leading member of the American Civil Liberties Union)

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👋 Hello there, world

The Finimize Community might be scattered across the four corners of the globe, but we’re still in this together.

Our new audio series, Keeping Up With The Community, introduces you to a few members of our community – from Nils in South Africa to Suzanne in Hong Kong – and gives you a chance to hear how they’re getting on. We started with our very own VP of Community in London: how are you doing, Max?

📚 What we're reading

Could this be the best time to launch a startup? (Sifted)
Good can come from bad (Scientific American)
Drumming up support for typewriters (Gizmodo)

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Finimize - 😨 JC Penney’s bankruptcy nightmare

📉 Why do some investors think US stocks will fall another 40%?

Today's big stories

Eye Candy

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Don’t Bank On It

Fright Night

What’s Going On Here?

What Does This Mean?

Why Should I Care?

👋 Hello there, world

Older messages

💪 Blackstone: what coronavirus?

💪 Roche takes on coronavirus

📺 Everyone. Watches. Netflix.

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💩 China breaks records

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