Today's big stories

An American activist investor has targeted Commerzbank to push for big changes
Our analysts check out an overlooked commodity that's performed three times better than gold this quarter – Read Now
Fashion giant Inditex reported a coronavirus-battered quarterly loss

1/3

N’awwwkward

What’s Going On Here?

American activist investor Cerberus Capital Management wrote Commerzbank a cute little note just to let the firm know it's completely failing its shareholders' interests.

What Does This Mean?

Cerberus’s beef is that Commerzbank hasn’t met the financial targets it set itself back in 2016, and continues to focus on unprofitable revenue growth without cutting costs. Commerzbank has refused consultancy services from Cerberus’s advisory business too – an offer its rival Deutsche Bank readily accepted in the past. And what do you know, the activist investor is completely on board with Deutsche’s turnaround plan…

Cerberus has given Commerzbank a list of demands, including its own seat on the board so it can directly influence the company’s strategy. And if those demands aren’t met, the bank reckons it could team up with other investors like the German government – also critical of Commerzbank’s plans – to force the changes it wants.

Why Should I Care?

For markets: Power to the… er, multinationals.
When activists wield their influence in hopes of improving a company’s fortunes, their success can result in a rising share price that benefits other investors too – which might be why some bought into Commerzbank on Wednesday, pushing up its share price. Aviva might've been inspired too: the insurer used its status as one of the biggest shareholders in HSBC and Standard Chartered to voice disapproval of their support for Hong Kong’s new security rules this week, perhaps hopeful that added pressure will change their minds.

The bigger picture: Losing interest.
The Federal Reserve shared its latest views on the US economy on Wednesday, and banks will no doubt be keen to consider how the central bank might support the economy without lowering interest rates and hurting banks’ profits – via “yield curve control”, for example. But if rates do fall, at least one bank – Morgan Stanley – is ready to bolster its investment management business with acquisitions in an effort to help insulate it from the effects of low rates.

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2/3 Premium

Surf’s Up

What’s Going On Here?

The gold price may have rebounded 17% from its March lows, but silver is riding a wave that’s seen it outshine its glossy cousin by quite some way.

Get the full story with Finimize Premium

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3/3

Nude Awakening

What’s Going On Here?

Inditex – the world’s largest clothing retailer – was left feeling pretty exposed on Wednesday after revealing it made its first-ever loss as a public company last quarter.

What Does This Mean?

Inditex – owner of fashion chains Zara, Massimo Dutti, and Berskha – reported revenue for February, March, and April that was 44% lower than the same time last year. That, despite a 50% rise in its online sales last quarter: ecommerce alone – which contributes much less to Inditex’s sales than its stores do – couldn’t make up for the 90% of outlets that were shuttered in April. Add the company’s $350 million provision for store improvements into the mix, and the fashionista ended up closing the quarter almost $500 million in the red.

Still, this quarter looks like it’ll better match Inditex’s style: May kicked off with another 51% drop in sales, sure, but they’re “only” down 34% so far in June – and just 16% in markets that were fully open. In fact, Inditex reckons sales China, Japan, and South Korea are now completely back to normal.

Why Should I Care?

For markets: Fast and furious.
Inditex’s stock rose just over 1% on Wednesday, potentially because it benefits from brands that can get the newest trends to customers almost as soon as non-essential stores reopen worldwide. The retail juggernaut takes about a month to get fresh styles into its stores – a major competitive advantage in today’s fast-fashion environment – while rival H&M keeps customers waiting for closer to six months.

For you personally: Sitting pretty.
Inditex now has 10% less inventory than this time last year, along with $6.6 billion worth of cash in the bank. That should mean the company’s under less pressure than its less well-off competitors to shift idle stock by offering hefty discounts (tweet this). Primark – the low-cost fashion retailer that famously doesn’t have an ecommerce business – has also said it won't offer discounts when it reopens either.

Get invested: How to profit from coronavirus-immune retailers.

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💬 Quote of the day

“Hate is too great a burden to bear. It injures the hater more than it injures the hated.”

– Coretta Scott King (an American author, activist, and civil rights leader)

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🤔 Q&A · RE: Wait, What?

“Is the US economic recovery likely to be ‘V-shaped’?”

– Oluwatobi in Lagos, Nigeria

“It’s certainly possible the economy will rebound as quickly as it shrank, Oluwatobi – as long as the coronavirus continues to clear up and people and businesses start spending again. If that doesn’t happen, it’s more likely to be a slower ‘U-shaped’ recovery or Nike-style swoosh, where the economy initially rebounds but then drifts up more slowly. Of course, the recovery economists are dreading most is the ‘W-shaped’ kind: an initial bounceback nixed by an economy-disrupting resurgence of the pandemic.”

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🌎 Finimize Community

🤔 Did you know…?

Just because an event is being run by our Hungarian Finimizers doesn’t mean you can’t go if you’re, say, based in Hong Kong. Everyone’s welcome. In fact, the only reason not to go is if you’re… well, asleep. Timezones are a real headache like that.

🇭🇰 Hong Kong: The Big Data Revolution – 9pm Hong Kong Time, June 11th
🇫🇷 France: The Future of Blockchain & Cryptocurrency – 6.30pm CET, June 17th
🇭🇺 Hungary: What’s Next For The Energy Market? – 6.00pm CET, June 23rd
🌍 Global: Finimize Live AMA – 1.30pm UK Time, June 30th

📚 What we're reading

The mundane has never been so appealing (The Atlantic)
Akon’s building “his very own Wakanda” (Evening Standard)
Socially distant selfies, anyone? (Protocol)

Finimize - 💪 Activism really works

Today's big stories

N’awwwkward

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Surf’s Up

💧 Revitalize your income

Nude Awakening

What’s Going On Here?

What Does This Mean?

Why Should I Care?

💸 Get paid monthly by your investments

🤔 Did you know…?

Older messages

📈 Tech stocks break records

💉 The 240 billion coronavirus cure

🇺🇸 Best jobs report ever

🇺🇸 Big tech leaves America

❗️ Fact-check: Twitter’s screwed

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