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Today's big stories

The tech-focused Nasdaq stock index fell into “correction” territory...
...But at least one investment giant is skeptical this marks the bursting of tech stocks’ bubble – Read Now
International currency investors think the British pound could fall to its lowest level since 1985

1/3

Fast And Furious

What’s Going On Here?

Hasta la vista, baby: after hitting record highs just last month, the Nasdaq Composite index – dominated by major US tech stocks – crunched into a technical “correction” this week.

What Does This Mean?

The Nasdaq had jumped 31% last quarter and another 20% since July, reaching its highest level in history (even when adjusting for inflation). But it fell this week into its fastest-ever correction, dropping more than 10% from that recent peak. There’s nothing particularly special about the double-digit decline, beyond the potential indication of investor pessimism. A more worrying – yet unlikely – threshold would be a 20% drop, which heralds a “bear market”.

The correction might’ve been down to investors’ long-predicted “rotation” out of speculative Big Tech stakes and into economic-growth-reliant “cyclical” and cheap-looking “value” stocks (tweet this). Other major US indexes were dragged down too – and tech’s tumble was likely exaggerated by its prior reliance on investors buying optimistic short-term stock options.

Why Should I Care?

For markets: Dude, where’s my Tesla?
The electric carmaker’s stock – a Nasdaq component – has fallen more than 20% in the last few days. That may be due in part to the recent revelation that its shares won’t yet be included in the most influential American stock index of them all. Some $4.3 trillion is indiscriminately invested in S&P 500 stocks via exchange-traded funds, and the expectation was that Tesla would soon get in on the action. Without that advantageous autopilot, investors – who’ve seen Tesla’s share price rise 300% this year – might’ve been minded to sell down stakes and take some profit.

The bigger picture: No stop signs, speed limit.
US stocks bounced back on Wednesday – though long-term investors probably weren’t surprised. According to learned stock historians, a short, sharp selloff following a steep recovery is par for the course as markets settle back down. And according to analysts at investment bank Morgan Stanley, company earnings are improving more quickly than expected – likely giving stocks another boost.

Get invested: Why stocks respond to news in ways you might not expect.

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2/3 Premium

Only A Wobble

What’s Going On Here?

With tech stocks sliding 10% in a matter of days, some investors foresee a repeat of the 2000 dotcom bust. But $1 trillion US investment manager Invesco thinks the market’s foundations aren’t so shaky…

Get the full story with Finimize Premium

Learn to invest like a pro with Finimize Premium

🔲 Not that kind of Square

Payment processing. Once upon a time you might have thought it rigid, boring, and stuffy. But not any longer – at least, not with Square. In fact, it’s quite the opposite…

Square offer a nifty set of flexible tools ready for nearly any job. See, the folks over there set out to help sellers of all shapes and sizes run their businesses their way. Square aren’t one-size-fits-all – none of that square-peg-in-a-round-hole nonsense here.

Whether you’re selling online, offline, or at the top of Mt. Everest, Square have the tools to help you succeed. Plus, you only ever pay for what you need. No extra fees, no long term contracts, and no surprises – just fast, secure payments you can depend on.

Get Square

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3/3

Dog Pound

What’s Going On Here?

With the UK locked in tense negotiations with the European Union (EU) this week regarding the terms of its Brexit, some investors believe the value of the country’s currency could soon fall beneath longstanding lows.

What Does This Mean?

The coronavirus pandemic and its global ramifications have understandably loomed large in investors’ minds this year. But as the December end of the UK’s EU withdrawal “transition period” draws nearer, analysts are increasingly worried about the prospect of a “no-deal” Brexit – or one in which the UK potentially breaks international law. If that happens, investors could ditch riskier global bets; and according to Allianz Global Investors, the pound’s value in US dollars could drop to $1.14 versus $1.30 now – its lowest since 1985.

Other analysts admittedly think that’s an unlikely scenario. Investment banks Goldman Sachs and Morgan Stanley, for example, reckon a deal is more likely than not – and most experts think the pound should increase in value against the dollar next year. Then again, you know what they say about experts…

Why Should I Care?

For markets: Bear trap.
A weak currency isn’t all bad news: foreign buyers getting more bang for their buck (or euro, or yuan) could buy more British products, boosting the UK economy. But investors might still be cautious: a seemingly attractive stock market valuation may belie weak post-Brexit UK company earnings growth potential. Those who’d bought British stocks might end up snared in a so-called “value trap”, hoping for a recovery that never comes.

The bigger picture: The lady is a tramp.
It’s not just the UK’s trade policy causing problems. French luxury goods giant LVMH on Wednesday pulled out of its planned $16 billion takeover of American jeweler Tiffany’s, blaming US trade taxes for making business more expensive and a deal less attractive. Tiffany’s now plans to sue to force through the purchase.

Act on that: How you can profit from currency swings.

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💬 Quote of the day

“The only way to make sense out of change is to plunge into it, move with it, and join the dance.”

– Alan W. Watts (a British writer and speaker)

Tweet this

🤔 Q&A · RE: Swipe-PO

“How do special-purpose acquisition companies (SPACs) work, and why do private investors like them?”

– Rohan in London, UK

“SPACs are ‘shell companies’ which exist solely to list on a stock market, raising money from public investors which they then use to buy other, usually private, companies. Historically, investors in a private company ‘exited’ by selling their stakes to another business – a trade sale – or to other investors, either private or public. The latter process typically involves an expensive and lengthy initial public offering. If a private company’s bought by a publicly listed SPAC, however, then the SPAC effectively becomes that company. The value of the SPAC’s existing public shares will reflect that of the private company (or companies) it bought – and the private investors can then simply sell those shares to release cash.”

🙋 Ask a question

2020: No touching 💳

We don’t need to tell you about social distancing. This year, everything has gone touch-free – and payments are no exception. If you haven’t made the switch to contactless yet, Square have you covered – no germ-exchange required.

Square provide the four-sided hardware – and software – you need to run your business touch-free. With their contactless payment options, you can accept Apple Pay and contactless cards, no sweat. So everybody can keep their cooties to themselves.

What’s more, Square are offering a sweet 20% discount on all their contactless hardware till September 22nd. Because you still need tools to run your business even when it’s not business as usual.

Just use the code SQUARE20 when you check out. And whatever you do, don’t touch people’s credit cards – we hear they’re dirty.

Go Contactless

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Want to learn more about Finimize Premium? Join our Friday webinar: we’ll show you how to save yourself hundreds of hours of research and level up your financial knowledge within minutes. And you’ll even get access to a special subscription…

💸 Level Up with Finimize – 8am New York Time / 1pm UK Time, September 11th (free to attend)
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📚 What we're reading

Is innovation an overhyped delusion? (Fast Company)
Patagonia photographed 104 years apart (CNN)
A psychologist’s approach to saving money (Psyche)

Finimize - 🤢 Tesla's 30% crash

Today's big stories

Fast And Furious

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Only A Wobble

🔲 Not that kind of Square

Dog Pound

What’s Going On Here?

What Does This Mean?

Why Should I Care?

2020: No touching 💳

😎 Make smarter financial decisions

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