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Today's big stories

Online travel company Expedia reported earnings far worse than expectations late on Wednesday
Sustainable investing currently offers market-beating returns... if you're willing to compromise on the "sustainable" bit – Read Now
A survey of business activity in the UK showed some signs of improvement in May

1/3

Travel Sick

What’s Going On Here?

Expedia’s earnings arrived on Wednesday looking a little worse for wear – and investors seemed to have sensitive stomachs of their own, sending the online travel company’s shares down as much as 5%.

What Does This Mean?

Expedia’s first-quarter revenue fell 15% – its first yearly revenue decline in eight years – as would-be holidaymakers shelved their coronavirus-afflicted travel plans, in turn knocking both accommodation and air sales. And while a first-quarter loss is nothing new for a company that does its big business in the summer months, the size of that loss – six times bigger than a year ago – very much was.

Like most of the travel industry, Expedia is bearing the brunt of coronavirus. Even in February, before the pandemic had fully taken hold, the company announced it was cutting 3,000 jobs as a way to save on costs. And by March, it'd revealed it was raising $3.2 billion – mostly through debt – to strengthen its financial position for the turbulent months to come.

Why Should I Care?

For markets: Rental health awareness.
On the plus side, the company did say it was seeing more bookings over the past few weeks as governments gradually ease lockdown restrictions. That's mainly being led by the company’s vacation rental business, Vrbo, as travelers opt to rent close to home rather than book hotels further afield. It could also be positive feedback for Vrbo rival Airbnb, which has had to tap a fresh $1 billion investment to keep its own business ticking over.

Zooming out: Best-ish Buy.
Expedia had company on Thursday: consumer electronics retailer Best Buy reported its first-quarter earnings fell 40%. That’s despite an early-pandemic shopping surge in which customers kitted out their home offices, and despite a doubling in online sales after the company shut its physical stores. Best Buy’s now begun reopening some of those stores, but it remains to be seen how many of the 50,000 employees the company furloughed in April will be needed to run them.

Learn more: Should you invest in Airbnb when it eventually IPOs?

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2/3 Premium

She’s A Fixer-Upper

What’s Going On Here?

So-called sustainable companies might’ve outperformed the wider markets during the coronavirus crisis, but that could be down to some very unsustainable practices…

Get the full story with Finimize Premium

3/3

Lost The Pot

What’s Going On Here?

A survey of business activity in the UK released on Thursday showed May wasn’t exactly pretty, but it was a masterpiece compared to the record slump of the month before.

What Does This Mean?

May’s data is starting to raise hopes that the recent UK economic contraction might be bottoming out – hopes that are being lifted further still by the easing of lockdown restrictions this month. Given that the pandemic’s forced plenty of businesses to shut up shop and their workers to stay at home, it’s not exactly a surprise that business activity continued to contract. The good news is that the contraction was at a slower rate than the previous month.

The bad news is that the pace of decline is still far worse than at any point during the 2008 financial crisis. In fact, more data released on Thursday showed British factory output has fallen to its lowest level in more than four decades (tweet this). No big shocks there, either: collapsing demand and supply chain disruptions have hit Britain’s manufacturers hard.

Why Should I Care?

For markets: Damage control.
The fallout from coronavirus is pushing Britain’s central bank – which expects the UK economy to shrink by 25% this quarter – to come up with even more ways to juice the economy. The bank even revealed on Wednesday it’s actively considering lowering interest rates into negative territory for the first time in history. And why not? It’s not like the UK government isn’t already selling bonds with negative yields as it is…

For you personally: Time to move in?
While negative interest rates won’t be helpful for savers, they could be for those who are thinking about taking out a mortgage on a property. And those future homeowners had more to cheer about on Thursday: British insurer and real-estate manager Aviva said it expects UK residential property prices to drop 12% what with the whole “pandemic” thing.

Learn more: How to tell if buying a house makes sense for you.

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💬 Quote of the day

“Every man can transform the world from one of monotony and drabness to one of excitement and adventure.”

– Irving Wallace (an American author and screenwriter)

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📈 All’s well that trends well

Here’s some of the most popular Finimize Premium content this week…

Premium Insights
💵 How much cash should you have in your portfolio?
📈 How to profit from central banks’ next moves
👋 Why one fund’s turned its back on a favorite investment

Packs
🛍 How to take advantage of the retail slump
👠 Vogue’s thoughts on what’s next for the luxury industry
🙌 Your guide to the basics of investing

Psst, these links go to our app – check them out on your phone.

🌍 Finimize Community

🎩 Three is a magic number

We have three big upcoming events, each more upcoming than the last. First up, Making Sense of Oil Market Dynamics, which will be every bit as dynamic as the name suggests. Next, Seizing Opportunity in Times of Crisis – “carpe opportunitiem” and all that. And last but not least, France’s The Future of Blockchain and Crypto – or blockchain et crypto, as they probably say. Incroyable.

🇦🇪 UAE: Making Sense of Oil Market Dynamics – 5.00pm Dubai Time, May 27th
🇺🇸 USA: Seizing Opportunity in Times of Crisis – 12pm Pacific Time, May 29th
🇫🇷 France: The Future of Blockchain & Cryptocurrency – 6.30pm CET, June 17th

📚 What we're reading

Try giving up control (Electric Literature)
Men with quarantine beards, rejoice (The Independent)
Take that, global warming (Science Alert)

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Finimize - 🤧 Expedia feels the coronavirus effect

Today's big stories

Travel Sick

What’s Going On Here?

What Does This Mean?

Why Should I Care?

She’s A Fixer-Upper

Lost The Pot

What’s Going On Here?

What Does This Mean?

Why Should I Care?

📈 All’s well that trends well

🎩 Three is a magic number

Older messages

⛔️ No more Facebook ads

📈 Walmart loves stockpiling

😓 SoftBank's 18 billion dollar regret

🤬 Recession, recession everywhere

📉 Aramco takes a huge hit

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