Finimize - 🕺 TikTok's 3 billion dollar moves

| That's a lot of pre-COVID profit | Japan throws money at the problem |

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Hi Newsletterest, here's what you need to know for May 28th in 3:11 minutes.

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Today's big stories

  1. TikTok-parent ByteDance reportedly made a cool $3 billion profit last year, cementing its position as the world’s most valuable startup
  2. Our analysts identify two investment approaches that could provide opportunity amid an economic recovery – Read Now
  3. Japan announced a $1.1 trillion support package on Wednesday to help its economy deal with the damage caused by coronavirus
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Tok The Tok

Tok The Tok

What’s Going On Here?

ByteDance – the parent company of viral video app TikTok – isn’t just the world’s most valuable startup: a report on Wednesday showed it’s also wildly profitable.

What Does This Mean?

Everyone’s favorite venue for videos of dancing teddies and clothes-wearing dogs more than doubled its revenue to $17 billion in 2019, while also recording a profit of $3 billion. That’s roughly $2 profit for each of its 1.5 billion monthly users – and we’re talking good old-fashioned net income, not the creative metrics some startups have been known to use.

Those numbers put Beijing-based Bytedance in social’s big leagues, beating YouTube’s $15 billion revenue and closing in on Instagram’s $20 billion haul. And in even more promising signs, the figures are from before COVID lockdown – which has inspired a whole new cohort of teens, celebrities, and grandparents to film their own #wipedownchallenge vids.

Why Should I Care?

For markets: A Chinese star.
TikTok is the first Chinese-built app to break out among western users: WeChat and Weibo have hundreds of millions of domestic users, sure, but they’ve struggled elsewhere. ByteDance has enjoyed success in China for years with news service Toutiao and Douyin – essentially TikTok in Chinese – but it wasn’t until its 2017 purchase of Musical.ly that the company finally reached a global audience. Analysts now reckon Bytedance would be valued at up to $180 billion if it sold shares in an initial public offering. It’s probably not in any rush, mind you: the company’s reportedly sitting on $6 billion in cash.

The bigger picture: Locking down your dollars.
As people spend more time at home these days, a new economy – the kind that suits TikTok to a, er, T – is emerging. Comfort foods are doing well, with Papa John’s and Domino’s Pizza both reporting increased sales this week, while TV-streaming is booming. And demand for consumers’ downtime is only going to get fiercer: AT&T is the latest to try its luck with the launch of HBO Max on Wednesday.

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2/3 Premium

This Recovery Looks Different

What’s Going On Here?

Global stock prices have now risen 30% over the past two months, but according to big broker Charles Schwab, the relative performance of “defensive” and “cyclical” stocks may create more cause for concern…

Get the full story with Finimize Premium

SPONSORED BY CHRISTOPHER CLOOS

😊 Consider us hygged

If you’re not familiar with hygge – the Danish concept of coziness, comfort, and contentment – it’s basically the feeling you get when you try on a pair of glasses from Denmark’s very own Christopher Cloos.

Maybe the hygge comes from the perfect fit, thanks to unbreakable spring hinges that provide tension for smaller faces and extra give for wider ones. Maybe the hygge comes from Christopher Cloos’ range of blue-light protection lenses – they do help ease screentime eye-strain, insomnia, and headaches, after all. Or if you’re lucky enough to work out and about, maybe the hygge comes from their sunglasses’ polarized lenses, which protect your eyes from the sun’s glare.

Truth is, we’re not Danish, so we aren’t experts on exactly which bit of the sunglasses creates all the hygge. All we know is how warm and fuzzy we feel on the inside. And we haven’t even got into how good Christopher Cloos make us look on the outside…

Check out their range, and make sure you use the code “Finimize” at checkout to get 20% off.

Explore The Range
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Shoo!

Shoo!

What’s Going On Here?

Japan announced $1.1 trillion of extra spending on Wednesday, in an effort to get rid the economy of the lingering effects of the pesky coronavirus.

What Does This Mean?

The world’s third-largest economy doubled down on last month’s spending measures with another, similarly-sized support package that brought the total to $2.2 trillion – equivalent to 40% of the country’s annual economic output. The package ranks among the world’s biggest used to deal with the pandemic, and includes support for struggling businesses, rental payments, and healthcare services.

The government also set aside almost $100 billion of emergency cash in case the country’s hit by a second wave of infections. But some experts argue it mightn’t be needed at all: as one of the few countries that didn’t impose a national lockdown in the first place, Japan has fewer restrictions to ease – the process that's often behind a second spike in cases.

Why Should I Care?

For markets: Size matters.
At more than twice the size of its economy, the Japanese government’s debt load is already one of the biggest in the world (tweet this). But all this new spending has to come from somewhere, so it’s no coincidence Japan announced it’s adding to that debt by bringing this year’s total bond issuance to $2 trillion. That, in turn, is putting extra pressure on the country’s central bank, which has been trying to keep the government’s borrowing costs low by buying up bonds to increase their price and lower their yields.

Zooming out: Let’s make this official.
Japan’s massive spending package wasn’t the only one to hit the news on Wednesday: the European Union made last week’s proposed $550 billion aid package official, while also upping its support to $800 billion – with the additional cashola coming in the form of loans to the regions and sectors worst affected by coronavirus.

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💬 Quote of the day

“It is not a daily increase, but a daily decrease. Hack away at the inessentials.”

– Bruce Lee (a Hong Kong-American actor, director, martial artist, and martial arts instructor)
Tweet this
🤔 Q&A · RE: Stuck In Limbo

“Why is a bond more attractive when inflation is falling? And why would it be attractive at all if its yield drops below the inflation rate?”

– Keaton in Cape Town, South Africa

“The first question is simple, Keaton: bonds make fixed payments throughout their lifetimes, and those payments are worth more when inflation is falling because you can buy more things with them. Your second question is more complicated: it has a lot to do with a bond’s “real yield”, which is what you get if you subtract the inflation rate from the bond’s yield. When the “real yield” is negative, investors are essentially paying to hold the bond, but they might still buy them for a few reasons. For one, they might be anticipating high demand for those bonds in the future, which would push prices higher and enable them to sell at a profit. For another, long-term bond yields tend to be higher than those of short-term bonds. So if nothing else changes, simply holding a bond – even one with a negative real yield – will likely see its yield fall and its price rise over time, again allowing holders to sell at a profit. And lastly, some large investors like insurance companies and pension funds are required to own bonds regardless of their real yields, so they’ll buy them up even if they have to pay to own them.”

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SPONSORED BY CHRISTOPHER CLOOS

😰 Where do we begin, Christopher Cloos?

There’s always some work that goes into picking what to say about our ad partners in the space of a handful of words. But Christopher Cloos have gone and made that much trickier.

Because look, we could just talk about how great their eyewear looks. Their expert craftsmanship, their eye for detail, their range upon range of styles so you can find exactly what suits you…

But if we did that, we’d forget to talk about the practicalities, like the blue-light range that helps ease eye-strain and headaches during screentime, or the sunglasses with polarized lenses that reduce glare when you’re out and about, or the unbreakable spring hinges that fit the frames snugly to your face and never get bent out of shape…

And if we focused on those, we’d never get round to the great ratings Christopher Cloos are getting from the media and customers about how great all of the above is.

So to save us from all that stress, we figured we’d just stick with one message: you can get 20% off when you use the code “Finimize” at checkout. That should do it.

Get 20% Off

💪 Small talk just got big

It’s so important to keep talking at times like this – even if it’s just about how your day was, or which shows you’re streaming, or how the plummeting price of crude and its subsequent geopolitical tensions could have an enduring impact on the Canadian economy, or what you’re having for dinner. Just keep it light, y’know?

🇺🇸 USA: Seizing Opportunity in Times of Crisis – 12pm Pacific Time, May 29th
🇨🇦 Canada: The State of Crude Oil & the Canadian Economy – 6.30pm EST, June 9th
🇭🇰 Hong Kong: The Big Data Revolution – 9pm Hong Kong Time, June 11th
🇫🇷 France: The Future of Blockchain & Cryptocurrency – 6.30pm CET, June 17th

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Image credits: skvalval - Shutterstock, tiktok - Giphy (edited) | Frederic Legrand - COMEO, Dech St, Atstock Productions - Shutterstock, Mark Doliner - Flickr, Giphy

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