Today's big stories

Ecommerce giant Shopify reported a stronger-than-expected second quarter
Several top investors have suggested a few left-field investment picks for this quarter – Read Now
Deutsche Bank, Santander, and Barclays’ second-quarter earnings were mixed

1/3

Check You Out

What’s Going On Here?

Investors went on a splurge on Wednesday: Canadian ecommerce platform Shopify reported a better-than-expected second quarter, and they pushed its stock up 10%.

What Does This Mean?

Everyone from Kylie Cosmetics to Allbirds uses Shopify’s software to power their online stores, and that selection only grew as the pandemic forced physical stores to close and shoppers to head online. That caused the total value of items sold on Shopify’s platform to hit $30 billion last quarter – a 119% climb compared to the same time last year, and more than eBay sold in the same period. Altogether, it helped Shopify's revenue rise by a higher-than-predicted 97%, and delivered a quarterly profit when analysts had been expecting a slight loss.

Why Should I Care?

For markets: List it and they will come.
An ecommerce company that’s benefiting from the pandemic-induced lockdown won’t come as a surprise to most investors: analysts have been forecasting it since March, and Shopify’s stock has more than doubled over the last six months. But Wednesday’s rise catapulted the platform to the title of Canada’s most valuable public company. It might’ve owed the uptick to the optimism investors harbor for the future: the number of new stores created on Shopify was up 71% last quarter compared to the first, which bodes well for its earnings momentum as they start selling in earnest.

The bigger picture: Good shop, bad shop.
Pretty recently, Amazon was the go-to choice for brands trying to boost their ecommerce presence. But between the fee hikes and the internet giant’s alleged use of third-party sellers’ own data to compete with them, the market’s been ripe for an alternative – and Shopify seems more than happy to fill that niche. It’s even teamed up with fintech Affirm to give shoppers a way to buy things via payment plans rather than credit card.

Get invested: How to pick the retail industry’s winners.

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2/3 Premium

Where To Invest This Quarter, Part 2

What’s Going On Here?

Top investment managers’ recommendations for the third quarter include a number of left-field “alternatives” – many of which normal investors can get involved with too.

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3/3

Once Bitten, Thrice Shy

What’s Going On Here?

Santander, Deutsche Bank, and Barclays all reported earnings on Wednesday, and flustered investors kept their distance from the banks' stocks, which fell by 4% or more.

What Does This Mean?

Let’s start with Santander: the Spanish bank reported its first loss in its 163 years because of “write-downs”. In other words, the bank reassessed the value of businesses like its consumer finance segment, and – realizing they were worth less due to coronavirus – lowered their valuations on its books, in turn knocking its profit.

The pandemic infected Barclays too, with the British bank forced to put more money aside in case of loan defaults than analysts had predicted. But that was – perhaps unsurprisingly by now – partly offset by a boost in its trading segment. The same was true of rival Deutsche Bank, which also benefited from its businesses that advise companies on mergers and acquisitions, as well as the sale of new shares and bonds.

Why Should I Care?

The bigger picture: Betting on the wrong dog.
While Deutsche Bank had a lot to thank trading for, the firm’s actually been trying to move away from risky activities since 2018. Barclays, on the other hand, has fought tooth and nail to keep risky segments front and center. Bit embarrassing: its trading business did well last quarter, sure, but not as well as its big US rivals (tweet this). Throw in uncertainty over whether it’ll be able to pay a dividend and its admission that the rest of the year – hobbled by low interest rates that make it harder to profit from loans – won’t be great, and it might make sense why investors ditched its stock on Wednesday.

Zooming out: There’s a good boy.
When Credit Suisse reveals its update on Thursday, it’s expected to follow in, er, its own footsteps by announcing sweeping restructuring measures. Put simply, the Swiss bank’s likely to combine its advisory and trading segments in an effort to improve its profitability.

Take action: How to avoid building up debts you can’t repay.

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💬 Quote of the day

“When you undervalue what you do, the world will undervalue who you are.”

– Oprah Winfrey (an American talk show host, media executive, and philanthropist)

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🤔 What do cryptocurrency and ETFs have in common?

Not much, frankly, but we are hosting events on both of them next week. Don’t miss out on tickets – and remember that if you’re a premium member, you get free and priority access to all our events.

🇺🇸 USA: Money Behaviors 2020 – 1pm New York Time, July 30th
🇬🇧 UK: Retire With A Smile – 1pm UK Time, August 4th
🇿🇦 South Africa: The Impact of COVID-19 on Cryptocurrency – 7pm South Africa Time, August 6th
🇬🇧 UK: The Power of ETFs – 12pm UK Time, August 8th
🇭🇰 Hong Kong: Is Fashion Going Out Of Style? – 9pm Hong Kong Time, August 11th
🇬🇧 UK: The Pathway to Homeownership – 5.30pm UK Time, August 15th

📚 What we're reading

We miss festivals too (Fast Company)
What’s the big deal with female nudity? (UnHerd)
Maybe don’t go with your gut (Marker)

Finimize - 😎 Shopify steals Amazon's business

Today's big stories

Check You Out

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Where To Invest This Quarter, Part 2

💰 Get rewarded with Crypto.com

Once Bitten, Thrice Shy

What’s Going On Here?

What Does This Mean?

Why Should I Care?

🤔 What do cryptocurrency and ETFs have in common?

Older messages

😨 US investors fear China

🎟️ New Events: Financial Stability, Finimize AMA, & What's Next For The Global Economy?

😭 Twitter desperately needs ads

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🇪🇺 Europe's 860 billion rescue package

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