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Hi Reader, here's what you need to know for November 20th in 3:03 minutes.

🦉 Our line-up for our Next Gen Investor Summit on December 1st is all set. You can find out who’s speaking here – spoiler: there’s a bevy of CEOs – and you can sign up for free here. It’s going to be a hoot.

Today's big stories

The Chinese government borrowed money at negative rates for the first time ever
With the US stock market getting riskier and riskier, there's one simple way you can protect your portfolio – Read Now
Macy’s earnings beat analysts’ expectations, but the department store chain’s sales were still down

1.

Surprise!

What’s Going On Here?

Turns out China is cast in the same mold as Europe after all: its government sold negative-yielding bonds for the first time ever on Wednesday (tweet this).

What Does This Mean?

The Chinese government only issued $5 billion worth of bonds, but demand was far higher than that: investors put in over $20 billion worth of orders. That level of interest pushed the bond’s price higher and higher, which in turn pushed its yield – i.e. the return an investor earns, which moves inversely to the bond’s price – down into negative territory. That’s an unusual situation: a negative bond yield effectively means the investor is paying to lend to the issuers of the bond – in this case the Chinese government. And while record low interest rates mean it’s not uncommon in Europe, it is a new experience for China.

Why Should I Care?

Zooming out: Why oh why?
There’s a couple of reasons investors would want to buy Chinese debt that won’t pay them anything. For one thing, they might be obligated to hold a certain portion of bonds in their portfolio – and considering yields on China's are still higher than those of Europe's, Chinese bonds are the lesser of two evils. For another thing, the Chinese government issued this debt in euros, which it doesn’t do very often. Europe's investors, then, might be keen to get in on a fast-growing economy that boasts a more positive outlook than either its European or US counterparts.

The bigger picture: Every man for himself.
The Chinese government may have no problem finding money to borrow, but the country’s state-backed companies sure do: just last week a Chinese state-owned coal miner defaulted on its loans, and it wasn’t the first. Investors are starting to worry this is the start of a string of failed repayments for state-owned companies, and that the government will happily just let them go bankrupt. And since it’s China’s banks that lent them money in the first place, their stocks have started to slide too...

You might also like: Where to look for high returns in China.

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🙋 Ask a question

2. Analyst Take

Why The US Stock Market Is Getting Riskier

What’s Going On Here?

The S&P 500 index is arguably the most important stock index in the world, and its five biggest companies now represent almost a quarter of its total market value.

But what does that actually mean for you?

Well, even if you’re only passively investing in ETFs that track the stock market’s performance, you could be taking on more risk than you realize.

See, those funds are overly concentrated in tech stocks at the exact time tech stocks are at a higher risk of underperforming.

But there is a simple solution if you want exposure to the US stock market while avoiding that particular problem – and that’s what we’re taking a look at in today’s Insight.

Get the full Insight here

3.

Macy’s Thanksgiving Day Dismay

What’s Going On Here?

Macy’s announced better-than-expected earnings on Thursday, but the department store chain doesn't have nearly as much to celebrate as you'd think.

What Does This Mean?

Shoppers have been cutting back their spending at department stores, it’s true, but Macy’s wasn’t hit quite as badly as expected: its sales at stores that have been open for more than a year “only” fell by 20% compared to the same time last year. And better yet, online sales grew by 27%. But let’s not get ahead of ourselves: that’s half as much growth as the quarter before at a time when everyone's shopping online. That’s worried investors – especially with retail’s busiest time of the year just around the corner…

Why Should I Care?

For markets: Think inside the box.
Macy’s is facing tougher competition these days from the likes of Walmart and Target, both of which reported better-than-expected results earlier this week. Those “big-box retailers” aren’t just roomy enough for some socially distant browsing, they have a huge variety of products too. And with those product ranges only getting wider – and trips to out-of-town mall complexes only getting less appealing – it’s easy to see why folks would want a one-stop shop for… well, shopping.

The bigger picture: L hath no fury.
L Brands – owner of Bath & Body Works and Victoria’s Secret – beat expectations in its earnings update on Thursday too. But unlike Macy’s, its sales were heading in the right direction: they climbed 14% versus the same time last year, on the back of a surge in demand for Bath & Body Works soap and sanitizers. You can't compete with Eau De 2020, Macy’s…

You might also like: Why you might still want to look at the tech titans.

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🙋 Ask a question

💬 Quote of the day

“Decide whether or not the goal is worth the risks involved. If it is, stop worrying.”

– Amelia Earhart (an American aviation pioneer and author)

Tweet this

🌎 Reforest the planet while you shop

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🌎 Finimize Community

🕺 Dance like no bond’s watching

Bonds are seen as a solid investment, sure, but there are risks that go along with investing in debt. Head over to our event on Monday: we’ll explain the common mistakes and oversights fixed income investors tend to make, and how you can spin past them with the grace of a trained dancer.

🤔 Avoiding the Common Pitfalls of Bonds: 11am Vancouver Time, November 23rd
💰 Dangerously Debt Free: 1pm Miami Time, November 24th
🤖 The Rise of Blockchain: 7pm Dubai Time, November 25th
💸 The Finimize Induction with CEO Max Rofagha: 1.30pm UK Time, November 27th
🚀 Next Gen Investor Summit: 12pm UK Time, December 1st

😭 In case you missed it

Here are some of the most popular pieces from our analysts this week…

Insights:

🏠 Why the world’s soaring home prices could be poised to tumble
💉 Three reasons a vaccine isn’t actually good news for investors
😳 Why oil stocks will be worth nothing in the long run

Packs:
👋 Everything you need to know about Airbnb’s upcoming IPO
🖥 How to filter the good investments from the bad
⚠️ What you can learn from the WeWork calamity

📚 What we're reading

Meanwhile, New Zealand is running out of caravans (Stuff)
“Get in, loser, we’re going online shopping” (Glossy)
Lest we forget McDonaldland (The Takeout)

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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 - 🥐 China goes all European

Today's big stories

Surprise!

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Why The US Stock Market Is Getting Riskier

Macy’s Thanksgiving Day Dismay

What’s Going On Here?

What Does This Mean?

Why Should I Care?

🌎 Reforest the planet while you shop

🕺 Dance like no bond’s watching

😭 In case you missed it

Older messages

🔨 Lowe's needs lockdown

💰 Airbnb's billions 'n' billions

🎉 Keep those vaccines coming

😧 Disney's crushing Netflix

🤫 Goldman writes off 2020

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