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Today's big stories

We’ve reviewed last quarter’s best and worst-performing sectors
One of our analysts doesn't think gold's recent gains are all they're cracked up to be – Read Now
Oil major Shell announced 9,000 job cuts

1/3

Looney Times

What’s Going On Here?

Now that the third quarter of a completely wacky year has come to an end, investors might want to take a look at which sectors performed best and why.

What Does This Mean?

The global economic recovery – knock on wood – kicked off in earnest last quarter, but US stocks were way ahead: they’d already risen 20% in the second quarter. Investors weren’t necessarily expecting a repeat of that, mind you, and it’s just as well: US stocks were “only” up 8% overall last quarter.

That was mostly thanks to a 14% rise in consumer discretionary stocks (led by the likes of Nike and Amazon), as well as a boost in seemingly foolproof tech and communications stocks. Industrials and materials firms also lent a hand as investors increasingly opted for “cyclical” companies – whose earnings growth is tied to the economy’s – and those that have benefited from an uptick in house-buying.

Why Should I Care?

For markets: From slump to bump.
Energy companies – down almost 20% on average – were last quarter’s worst performers. No big surprises: their earnings have continued to suffer from the pandemic’s effects, including plummeting oil and gas demand from once-major customers like airlines. But that slump might be about to turn: some analysts are anticipating a “rotation” away from the high-growth stocks that have been driving the market higher so far, and toward cheap-looking “value” stocks like oil.

The bigger picture: Everyone’s a pollster.
November’s US election is likely to have a bigger effect on stock markets than any single industry, but its impact on company earnings might actually be more positive than people think (tweet this). Investment bank Goldman Sachs has worked out that the outcome investors reckon is most likely – a big Democratic Party win – would boost profits 4%. There’ll be tax hikes, sure, but they’ll be more than offset by economy-boosting government spending.

Get invested: The perfect investment if you want to escape the market noise.

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2/3 Premium

Finimize Opinions: Gold’s Lost Its Shine

Gold might’ve been one of the best places to put your money in the past couple of years, but Finimize analyst Andrew isn’t convinced that run will continue…

“Without much sign of inflation on the horizon – and a small but noticeable bump in returns from other safe investments like US government bonds – I think the shiny metal’s appeal is on the wane.”

Check out why Andrew’s a gold skeptic in today’s Premium Insight

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3/3

Shell-Shocked

What’s Going On Here?

Investors were probably left a bit stunned as oil giant Shell announced up to 9,000 job cuts over the next couple of years.

What Does This Mean?

Shell had 83,000 workers at the end of last year, but it’ll have 7,000-9,000 fewer by the end of 2022. It’s all part of a restructuring that should, the company hopes, create a more streamlined business, save $2.5 billion in costs, and set it up for a lower-carbon future. The shift’s been ongoing, but it’s been accelerated by the pandemic.

Speaking of a lower-carbon future, Shell’s said it aims to become a net-zero emissions company by 2050. That’s the same target as its European rival BP, which announced 10,000 job cuts of its own in June. Maybe an unavoidable consequence of oil companies going green, then, is making their employees feel a little blue…

Why Should I Care?

For markets: Slip ‘n’ slide.
It’s no secret that oil companies are struggling, with both BP and Shell trying to save cash by cutting their dividend payments. And while US oil giants Exxon and Chevron have kept their payouts intact for now, that might not last much longer: oil’s price fell for the first time in four months in September, and oil traders think demand could take another 18 months to get back to pre-pandemic levels. Even once-loved shale oil companies are teaming up to cut costs and make it through in one piece.

Zooming out: Not-so-magical kingdoms.
Workers all over the world – not just those in the oil industry – are bearing the brunt of coronavirus. Disney announced 28,000 job cuts late on Tuesday, primarily across the parks and resorts that have been forced to shut their doors or limit attendance. And German tiremaker Continental announced on Wednesday it’d be slashing up to 30,000 jobs – or 13% of its staff – in response to weak demand and rising low-cost competition.

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💬 Quote of the day

“There was another life that I might have had, but I am having this one.”

– Kazuo Ishiguro (an English novelist and screenwriter)

Tweet this

🤔 Q&A · RE: Hail Caesars

“Why would William Hill accept the lower of the two takeover offers on the table?”

– Chet

“It’s essentially down to a pretty savvy bit of contractual work on Caesars’ part. Caesars, remember, is already in a joint venture with William Hill – and one of the terms allows it to shut that down if the latter is bought out by one of a number of specific companies. And since it was in a takeover battle with Apollo, it’ll add the private equity firm to that list. If William Hill accepted the higher offer, then, it would lose its access to the growing US gambling market through Caesars, which would lower its value and likely make Apollo less keen to buy in. Put simply, Caesars only had to offer enough to get William Hill to accept its takeover proposal, even if that was less than Apollo’s bid.”

🙋 Ask a question

🛩 This one’s for you, expats

So you’ve slung your napsack over your shoulders, waved goodbye to your doting parents, and moved halfway across the world with a pocket full of dreams. But dreams don’t pay the rent: join our event to find out how you expats can fill your pockets full of money too.

💸 The Finimize Induction: 2pm UK Time / 9am New York Time
🙋‍♀️ Healthy Financial Habits for Expats: 5pm UK Time, October 6th
👩‍💻 Estonia’s Startup Ecosystem: 5pm UK Time, October 7th
✈️ Healthy Financial Habits for US Expats: 5pm UK Time, October 15th
🍷 How To Hold Wine In A Diversified Portfolio: 2.30pm UK Time / 9.30am New York Time, October 21st

📚 What we're reading

Now this is a story all about how… (YouTube)
The most important election this year (AV Club)
Mind control is a headache (The Baffler)

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All content provided by Finimize Ltd. is for informational and educational purposes only and is not meant to represent trade or investment recommendations. You signed up to this mailing list at finimize.com or through one of our partners. © Finimize 2020

Finimize - 📉 Last quarter’s worst stocks

Today's big stories

Looney Times

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Finimize Opinions: Gold’s Lost Its Shine

🧐 Dress to impress with BOSS

Shell-Shocked

What’s Going On Here?

What Does This Mean?

Why Should I Care?

🛩 This one’s for you, expats

Older messages

💨 Uber’s high-speed deal

🎰 Caesars’ 4 billion dollar wager

🎮 Amazon pwns Google

😮 Some stocks are anti-vaxxers

🍑 Nike breaks the internet

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