Today's big stories

Apple sold almost $6 billion worth of bonds while going to battle with Fortnite
Two different share sales from two potentially undervalued companies could offer you a unique opportunity – Read Now
Morgan Stanley’s analysts have looked at which sectors are most over- and undervalued

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Mon-Apple-ly

What’s Going On Here?

Apple was accused of being too dominant by the makers of online game Fortnite late last week, but that didn’t stop the tech giant from selling $5.5 billion worth of new bonds.

What Does This Mean?

The whole brouhaha started when Fortnite allowed its users to make in-app purchases directly from its parent company, Epic Games. That way, it’d avoid the higher costs of Apple and Google’s app stores, which take a 30% cut of revenues. But when the rule-break got the app booted off both platforms, Epic refused to take it lying down: it responded with a lawsuit accusing Apple of being anti-competitive.

Investors certainly don’t seem to mind: they were happy to snap up the fresh bonds Apple sold late last week. Demand for them was so high, in fact, that the interest rate the company will pay on bonds that are due to be repaid in 40 years is just 1.18 percentage points higher than the US government’s bonds – arguably the safest in the world (tweet this).

Why Should I Care?

For markets: Homecoming.
Given that Apple already has $34 billion in cash and another $60 in cash-like “securities” on its books, you wouldn’t think it’d need to take on more debt. But a lot of that cash is currently abroad, and it’d be taxed significantly if brought back Stateside. So the company might be better off taking on debt in the US while it’s so cheap, and using the money to repurchase its stock and pay dividends, benefiting its shareholders.

For you personally: Thank you for your services.
Now that Apple’s the world’s most valuable public company, it has the potential to affect everyone’s investments. So while big tech lawsuits have been commonplace lately, the potential risk to its juggernaut services profits means the attack from Epic is likely to grab investors’ attention. Then again, maybe they shouldn’t be too worried: Apple’s new bundled subscriptions could make developers even more reliant on the tech giant for income.

Get invested: Our analysts on whether now’s the time to buy Apple.

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2/3 Premium

Rights, Not Flights

What’s Going On Here?

Two of the biggest names in European aviation are gearing up for controversial “rights issues” in a bid to bolster coronavirus-hit finances – and that may just represent a buying opportunity.

Get the full story with Finimize Premium

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3/3

Smart Money

What’s Going On Here?

Sit straight and face front: investment bank Morgan Stanley analyzed investors’ favorite UK sectors late last week, and we reckon there are valuable lessons for the rest of the world to learn.

What Does This Mean?

Morgan Stanley found that retailers and industrials firms were “relatively overvalued”, meaning their share prices compared to profits looked much higher than those of other industries. Meanwhile, the bank found that “defensive” sectors like food, beverages, and tobacco – where demand for products tends to be pretty stable no matter what – were undervalued, suggesting investors haven’t yet taken their resilient earnings into account. Oil and gas stocks were deemed undervalued too, but that might be because it’s one of the most “oversold” sectors. In other words, share prices have fallen so far – partly because of low oil prices and weak earnings – that some analysts think they’re now poised to bounce back. As for the overbought sectors, Morgan Stanley reckons they include “cyclical” industries – like mining and business services – that'd benefit most from an improving economic outlook.

Why Should I Care?

For you personally: Tools of the trade.
Exchange-traded funds (ETFs) can track medleys of different types of assets, including stocks that might be considered defensive or cyclical, or those grouped by industry. Picking individual stocks is inherently risky, so an ETF that helps spread your risk across several companies is a good bet for most people. And knowing what the pros have been up to – and why – might help you set up and adjust your portfolio appropriately.

The bigger picture: Mind the gap.
According to Goldman Sachs, “cyclicals” look even less attractive versus their defensive counterparts than they historically have done if you exclude tech stocks. But Goldman doesn’t necessarily think that means cyclical stocks won’t rise further. In fact, the bank reckons US stocks could still rise another 7% – in part thanks to cyclicals – if investors become even more optimistic about the future.

Take action: How you can profit from using “smart” ETFs.

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💬 Quote of the day

“To be awake, you must first be aware.”

– Lailah Gifty Akita (a Ghanaian writer)

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🌎 Finimize Community

🎉 Teach yourself how to invest

You’ve taught yourself how to bake sourdough. You’ve taught yourself how to do a Rubik’s cube. There’s just one thing left: teach yourself how to invest. We’ve invited two self-taught investors to talk you through it all from start to finish.

🇭🇰 Hong Kong: The Rise of Young China – 9pm Hong Kong Time, August 18th
🇺🇸 USA: The Self-Taught Investor – 1pm New York Time, August 19th
🇦🇪 UAE: Is The Worst Over For Oil? – 5pm Dubai Time, August 20th
🇬🇧 UK: Create your Financial Fitness Plan – 2.30pm UK Time, August 26th
🇩🇪 Germany: The Rise of Sustainable Investment – 11am Berlin Time, August 27th
🇬🇧 UK: Build Your Own Investment Portfolio – 11am UK Time, August 28th

📚 What we're reading

The 1% need face masks too (Artnet)
Your future home could charge itself (Grist)
Don’t be that guy (Psyche)

Finimize - 👾 Apple versus Fortnite

Today's big stories

Mon-Apple-ly

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Rights, Not Flights

💰 Get rewarded with Crypto.com

Smart Money

What’s Going On Here?

What Does This Mean?

Why Should I Care?

🎉 Teach yourself how to invest

Older messages

🎉 New Events: The Rise Of Young China, Self-Taught Investor & Is The Worst Over For Oil?

👻 Oil gets a little bit more frightening

💸 Extra Tesla shares for you

👑 Aramco loses its crown

🚫 America puts WeChat on notice

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