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Today's big stories

Goldman Sachs and Bank of America reported contrasting fortunes in the third quarter
Why investing in female-led firms may be positive for your portfolio – Read Now
Earnings reports from Just Eat Takeaway.com and ASOS illustrated the pandemic’s varying impact on online businesses

1/3

Snakes And Ladders

What’s Going On Here?

Goldman Sachs and Bank of America (BoA) became the latest investment banks to report positive third-quarter results on Wednesday – but while Goldman’s stock climbed, BoA’s slithered down 4%.

What Does This Mean?

Goldman beat investors’ expectations across the board. Facilitating clients’ trades of “FICC” investments – fixed income (like bonds), currencies, and commodities – as well as advising them on all manner of deals helped revenue come both thick and fast. That led to the firm reporting a much higher profit than predicted too.

BoA wasn’t quite as lucky. Its quarterly revenue was slightly more constricted than investors had forecast, although profit was more or less as planned – partly thanks to the new trend of banks putting less money aside in case of loan defaults. But given 84% of companies exceeded earnings expectations last quarter, merely doing as well as predicted didn’t satisfy investors hungry for a so-called “beat and raise”.

Why Should I Care?

For markets: Sustaining a sidewinder.
BoA seems to have missed out on the FICC trading boom – its business grew just 4% versus the same time last year, compared to Goldman’s 49% and JPMorgan’s 50%. What’s more, consumer banking – think savings and lending – is more important to BoA’s earnings than it is for rivals. Record-low US interest rates squeezing the amount the bank makes from loans by more than feared therefore added insult to injury – and perhaps encouraged investors to forgo patriotism in favor of profits.

The bigger picture: Change is what we do.
It’s tough right now being a bank like BoA or Citigroup, relying heavily on consumer and business loans to make money. As well as earning less interest than before, they’re on the hook for major losses if struggling customers fail to repay. Riskier activities like trading have been better bets for banks recently, and that probably won’t change this quarter: next month’s US election is expected to lead to a lot of investor chopping and changing.

If you can’t join ‘em, beat ‘em: How to outsmart the sharpest minds in finance.

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2/3 Premium

Powerful Women, Powerful Returns

What’s Going On Here?

New research from Goldman Sachs suggests that companies which promote women also promote profits – and sets out an easy way to track this in your portfolio.

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3/3

On A Platter

What’s Going On Here?

Global food delivery giant Just Eat Takeaway.com (JET) served up third-quarter earnings that delivered growth beyond investors’ voracious expectations on Wednesday.

What Does This Mean?

The Anglo-Dutch firm reported 46% more orders than the same time last year, going large on analysts’ 30-40% estimates. And as JET takes a cut of every food purchase it processes, that should make for a healthy rise in revenue. In its major UK, German, and Canadian markets, meanwhile, the newly engorged company’s growth was higher last quarter than at the height of the pandemic. Uber’s investors might like to take note: its sprawling food delivery business spans 45 countries, and strong appetites there would help offset still-weak taxi demand.

Why Should I Care?

The bigger picture: Your clothes still fit (for now).
Food delivery companies unsurprisingly benefited from increased orders during widespread lockdowns, but it seems new habits also die hard: JET, at least, is growing even faster as economies reopen, and so is its share price. You might have expected online fashion retailers to have lost out, however, given you’re probably wearing half as much as before. Yet while ASOS’s Wednesday earnings wore a subdued hue, sending its stock down 10%, European fashionistas Boohoo and Zalando have both stepped out in stronger-than-expected, share-price-boosting updates recently...

For markets: Measuring the reopening.
With the US economy the world’s largest, investors pay close attention to how quickly it is – or isn’t – getting back to business as usual. After all, what America and Americans are doing has major implications for global portfolios. Some things seem to be slowly getting back to normal; but the latest data shows weekly US usage of stay-at-home favorites like fitness apps and video conferencing respectively up 60% and 400% on a year ago, while instances of flight searches and eating out are down 40-50% (tweet this). That might help explain why food delivery is piling on the pounds – and, indeed, the dollars and the euros.

Make a difference: Expert views on what investments to pick in a pandemic.

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💬 Quote of the day

“Ill can he rule the great, that cannot reach the small.”

– Edmund Spenser (a sixteenth-century English poet)

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🤖 Thinking of investing in cryptocurrency?

Join today’s free event with our friends at Grayscale to learn how you can diversify your portfolio with cryptocurrency. Register for your ticket before they’re gone.

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📚 What we're reading

From blog post to tweetstorm in a single button press (TechCrunch)
We might not have free will at all (The Conversation)
How trees can help find missing persons (Atlas Obscura)

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Finimize - 🐍 Bank of America slips and slides

Today's big stories

Snakes And Ladders

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Powerful Women, Powerful Returns

🍲 WFH better with Daily Harvest

On A Platter

What’s Going On Here?

What Does This Mean?

Why Should I Care?

🤖 Thinking of investing in cryptocurrency?

Older messages

🍾 Morgan Stanley bottles it

🙌 New Events: A Beginners Guide To Investing & The Future Is Female

😱 IBM is no more

📉 30 reasons to ditch US stocks

🎬 Cineworld calls cut

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