Finimize - 😬 New trade tremors

The US spoils the ASML party, small-caps get a win, and headlong into the eye of the storm |
Finimize

TOGETHER WITH

Hi Reader, here's what you need to know for July 18th in 3:12 minutes.

From paperboy to the world's richest person, it sounds pretty good. But there's always room for improvement. So join us for 💰 How To Invest Like A Modern Warren Buffett at 5pm on August 14th. Grab your free ticket

Today's big stories

  1. ASML delivered some whoop-whoop results, but the threat of a US trade crackdown brought the mood way down
  2. Here's why where a firm makes its money is just as important as how it makes its money – Read Now
  3. The Russell 2000 index notched its best five-day streak since 2020, with smaller stocks gaining big

A Mixed Hand

A Mixed Hand

What’s going on here?

ASML reported solid profits, but geopolitical tensions threaten to cloud the firm’s outlook.

What does this mean?

Netherlands-based ASML – Europe’s most valuable tech company – raked in €1.6 billion ($1.7 billion) in the second quarter, comfortably above analyst forecasts. And more importantly, the firm’s order numbers, which give an inkling of future profit, blasted surprisingly higher – to $6.1 billion, up from $3.9 billion the same period a year ago. But ASML, which sells some of the most advanced chipmaking machines in the world, is nonetheless keeping itself grounded: the company left its humble outlook for the full year unchanged.

Why should I care?

Zooming out: Choppy waters.

The AI boom and the breakneck expansion of data centers are keeping semiconductor firms like ASML in the money. But it’s not all smooth sailing (it never is). The US is now threatening to slap its harshest trade restrictions on companies supplying advanced chip equipment to China. The so-called “foreign direct product rule” would apply to any foreign-made products sold in China that include American tech. That’s a problem for the likes of ASML and Tokyo Electron, with China making up roughly 26% and 20% of their respective sales. So the news sent both companies’ share prices tumbling on Wednesday.

The bigger picture: Spoiling the party.

Regulations just might be a dead weight on the chip industry’s meteoric rise. Export rules that went into effect early this year have already slashed a hole in the pockets of American companies, with the Federal Reserve Bank of New York estimating a $130 billion hit to their combined market value. And if these new restrictions are approved, it’ll make that hole even wider. No wonder, then, that firms are urging policymakers not to take that next step, warning that global businesses might simply strip US products from their supply chains to dodge the new mandate.

Copy to share story: https://app.finimize.com/content/a-mixed-hand

🙋 Ask a question

Analyst Take

Morgan Stanley Wants You To Understand Where Firms Really Make Their Money

Morgan Stanley Wants You To Understand Where Firms Really Make Their Money
Photo of Stéphane Renevier, CFA

Stéphane Renevier, CFA, Analyst

Knowing how a company makes its money is key – but knowing where can be just as important.

After all, when you snap up shares in, say, a European firm, you get more than just a slice of the local scene.

And that’s because while Paris or Berlin might be the home base, the real action could spread from New York to Shanghai.

Now, untangling the global sales streams can be tricky business. But, fortunately, Morgan Stanley has laid out the big trends for you.

That’s today’s Insight: a global look at where firms really make their money.

Read or listen to the Insight here

Your free guide to investing with AI

Artificial intelligence is slowly but surely becoming ingrained into our lives.

Condensing articles, checking out medical symptoms, writing tricky break-up texts: we’ve all been flocking to chatbots without a second thought, for better or for worse.

So it’s no surprise that AI investing tools have taken off in a big way. After all, they can tap into the insights of every resource imaginable to create tailor-made suggestions and solutions.

The only problem: AI can go rogue, and it doesn’t always understand the nuances of human thinking and communication. (Yet.)

So before you use the super-smart tech to sharpen up your strategy, read this free guide to find out how to invest with AI the right way.

Check Out The Guide

Small But Mighty

Small But Mighty

What’s going on here?

A stock index of smaller companies just notched its best five-day streak since 2020, with David coming up trumps over Goliath for the first time in a while.

What does this mean?

Until last week, US small-cap stocks – companies with a market value between $300 million and $2 billion – had been essentially flat all year. But that changed when an inflation report showed US consumer prices rising a lot less than expected in June. The news had traders betting that the Federal Reserve will move to lower its economy-dragging interest rates a tad earlier this year, and that kick-started a good ole rally in the small-cap department. See, slighter firms often carry some heavy short-term or variable-rate debt, so they get hit harder when borrowing costs go up – but they also get a bigger boost when those costs go down. And that’s why the Russell 2000 index, which houses these stocks, shot up by almost 12% in the past week.

Why should I care?

Zooming in: Slow train coming.

The inflation report was the fuel that ignited the rally, sure, but the scene was set a while back. In the US, small-cap stocks have been underperforming their more sizable siblings since 2014. That’s left them trading cheap – really cheap. And that’s not just in comparison to big-cap shares, but also relative to their own history. So, naturally, they’ve become prime targets for bargain-hunting investors looking for a bit of risky business.

The bigger picture: The race is on.

Those investors rushing into small-cap stocks might find they’re onto a winner later this year. The bigger kids have been out in front recently, but it’s the smaller fries that appear poised to take the earnings growth lead. Analysts see them raking in 27% more profit this quarter compared to a year ago – and 67% next quarter. That’s significantly faster growth than what the weightier firms are expected to see.

Copy to share story: https://app.finimize.com/content/small-but-mighty

🙋 Ask a question

💬 Quote of the day

"Blessed are the hearts that can bend; they shall never be broken."

– Albert Camus (a French philosopher)
Tweet this

SPONSORED BY DIREXION

Seize the day

Traders don’t see disaster when markets move quickly like they are today: they see opportunity.

With over 75 Leveraged & Inverse ETFs, Direxion gives traders the tools to trade opportunistically, however and whenever the market changes.

These Leveraged and Inverse ETFs help traders seek to amplify high-conviction trades by up to 300%, so you can make a bigger bet on a market move or technical signal without accessing more capital.

Plus, you can manage your level of risk every day with Direxion, so you’re not stuck out in the cold if the winds change.

Inverse ETFs, meanwhile, allow traders to bet on price dips, without having to “short” an asset. So if you think everyone’s backing the wrong trend, you can go against the grain.

Discover tools for risk-tolerant traders with Direxion.

Find Out More

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. Click here to obtain a Fund’s prospectus and summary prospectus or call 866-476-7523. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Leveraged and Inverse ETFs pursue daily leveraged investment objectives which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying index over periods longer than one day. They are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk and who actively manage their investments.

Direxion Shares ETF Risks — An investment in the ETFs involves risk, including the possible loss of principal. The ETFs are non-diversified and include risks associated with concentration that results from an ETF’s investments in a particular industry, sector or company, which can increase volatility. The leveraged and inverse ETF utilize derivatives, such as futures contracts and swaps which are subject to market risks that may cause their price to fluctuate over time. The leveraged and inverse ETFs do not attempt to, and should not be expected to, provide returns which are a multiple of the return of their respective index or underlying security for periods other than a single day. The leveraged and inverse ETFs may also subject to leverage, correlation, daily compounding, market volatility and risks specific to an industry, sector or company. The non-leveraged ETFs are subject to certain risks, including imperfect index correlation and market price variance, which may decrease performance. The non-leveraged ETFs may invest in a relatively small number of issuers and, as a result, be subject to greater risk of loss with respect to its portfolio securities. The non-leveraged ETFs may experience greater fluctuation in its net asset value as compared to other investments. The non-leveraged ETFs may be appropriate for investors with a long-term investment time horizon, who primarily seek capital growth, and who are able to tolerate periods of prolonged price declines. Please read each ETF’s prospectus for a more complete description of the investment risks. There is no guarantee that an ETF will achieve its investment objective.

Distributor: Foreside Fund Services, LLC.

When you support our sponsors, you support us. Thanks for that.

If you want your brand featured here, get in touch.

🎯 On Our Radar

1. Deep down. Why your next wellness trip might take you into a cave.

2. Bitcoin’s big news. You can trade the most popular cryptocurrencies without fronting big prices with these micro-sized tools.*

3. Ice, ice, baby. How to use your freezer as the ultimate cooking tool.

4. Time to take your first steps. Here's how to get started on your investment journey.**

5. A real whirlwind. An interview with a genuine storm chaser.

** Your capital is at risk. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

When you support our sponsors, you support us. Thanks for that.

🌍 Finimize Live

🤩 Grab your tickets...

All events in UK time.
💃🏼 Finimize Ladies Investing Club: 6.30pm, July 18th
🤫 Secret Strategies Of A Long-Term Investor: 5pm, July 24th
💰How To Invest Like A Modern Warren Buffett: 5pm, Aug 14th
😎 Make More Out Of Your Portfolio With US-listed Options: 5pm, Aug 15th
🔨 Five Portfolio Hacks For Busy Investors: 5pm, Sept 12th
🚀 2024 Modern Investor Summit: 2pm, December 3rd

❤️ Share with a friend

Thanks for reading Reader. If you liked today's brief, we'd love for you to share it with a friend.

You stay classy, Reader 😉

We’d love to hear your thoughts. Give feedback

Want to advertise with us too? Get in touch

Image Credits:

Image credits: ASML | Dall-e

Preferences:

Update your email or change preferences

View in browser

Unsubscribe from all Finimize Emails

😴

Crafted by Finimize Ltd. | 280 Bishopsgate, London, EC2M 4AG

All content provided by Finimize Ltd. is for informational and educational purposes only and is not meant to represent trade or investment recommendations. You signed up to this mailing list at finimize.com or through one of our partners. © Finimize 2021

View Online

Older messages

👀 What's going wrong for banks

Tuesday, July 16, 2024

US big banks open their books, Saudi Arabia stumbles, and a bird the size of a credit card | Finimize TOGETHER WITH Hi Reader, here's what you need to know for July 17th in 3:13 minutes. 🤫

💰 Google's mega deal

Monday, July 15, 2024

Google's massive security deal, China's limping economy, a brainteaser, and a recipe for breakfast ice creams | Finimize Hi Reader, here's what you need to know for July 16th in 3:10

🇨🇳 China’s game-changing meeting

Sunday, July 14, 2024

Plus, everything you need to know for the week ahead | Finimize Hi Reader. Here's a look at what you need to know for the week ahead and the things you might have missed last week. Good And Plenum

😲 Wow, JPMorgan results

Friday, July 12, 2024

JPMorgan's expectation-beating results, analysts' predictions for earnings season, and a mutant frog | Finimize TOGETHER WITH Hi Reader, here's what you need to know for July 13th in 3:14

🌡️ Taking your temperature

Thursday, July 11, 2024

Here are the results of the Finimize Modern Investor Pulse | Investment platforms are starting to offer round-the-clock trading | Finimize TOGETHER WITH Hi Reader, here's what you need to know for

You Might Also Like

🇨🇳 China lands with a bump

Tuesday, October 8, 2024

Chinese stock markets are back in the doldrums, Pepsi's a disappointment for investors, and 216 Prime Day deals | Finimize TOGETHER WITH Hi Reader, here's what you need to know for October 9th

It took a few years, but mortgage rates are noticeably coming down.

Tuesday, October 8, 2024

Find the mortgage lender that suits you best. ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

‘You Can Only Tighten Your Belt So Much’

Tuesday, October 8, 2024

How different generations approach retirement ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

Americans are using AI at fairly high rates. What does this mean for the economy?

Tuesday, October 8, 2024

A new study finds Americans have adopted generative AI faster than personal computers and the Internet. Does that mean we're about to see a long-awaited increase in productivity growth? View this

🇬🇧 UK house prices rise

Monday, October 7, 2024

The UK sees house prices rise, Tokyo Metro is running toward a solid IPO, and meet Dracula | Finimize TOGETHER WITH Hi Reader, here's what you need to know for October 8th in 3:04 minutes. UK house

Money and Legitimacy

Monday, October 7, 2024

Plus! Moats; Big Tech Sees Like a State; Shifting Costs; Managing Macro; Experimentation Money and Legitimacy By Byrne Hobart • 7 Oct 2024 View in browser View in browser In this issue: Money and

Win A Winter Escape to Sunny St. Lucia 🇱🇨

Monday, October 7, 2024

Enter now for the chance to win a tropical vacation. ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

Struggling with Trading? Let Apollo Do the Heavy Lifting!

Monday, October 7, 2024

Say goodbye to hours of trade hunting ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏

💸 What to expect from earnings season

Sunday, October 6, 2024

Plus, everything you need to know for the week ahead | Finimize 👋 Hi Reader. Here's what you need to know for the week ahead and what you might've missed last week. Make Bank Earnings season is

Longreads + Open Thread

Saturday, October 5, 2024

Philosophy, North Korea, Doing the Reading, Ponzis, Accommodations, Careers, Competition, The Book, AI Longreads + Open Thread By Byrne Hobart • 5 Oct 2024 View in browser View in browser Today's