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Today's big stories

BNY Mellon argued stock markets might pull back this month after crushing records in November
New research has laid out the economic winners and losers from climate change inaction – Read Now
Goldman Sachs went all in on investing in the UK

1.

Bumpy Ride

What’s Going On Here?

Major stock indexes might’ve flown over record highs in November, but investment bank BNY Mellon says stock markets could be feeling a little worse for wear by the end of the year (tweet this).

What Does This Mean?

Double-digit returns within the space of a month are rare for stock markets, but that’s exactly what the Stoxx 600 Europe index – which comprises 90% of the value of European stock markets – did in November, banking a record-breaking 14% rise. It even outperformed the major US indexes – and this in a month where the S&P 500 reached new highs and the Dow Jones Industrial Average posted its biggest monthly jump since 1987.

Cue Christmas Grinch BNY Mellon, which thinks stocks could drop up to 7% before the year ends. And it’s not alone: other analysts have argued that the size and speed of the recent rally suggests stock markets probably don’t have much further to go this year.

Why Should I Care?

For markets: Blessings in disguise.
BNY Mellon thinks the drop could actually work in investors’ favor and represent a good time to buy into some new stocks. The investment bank’s still optimistic for the future, after all: it reckons that once Europe and the US have limped through next quarter’s lingering coronavirus effects, a stock market recovery should kick off in the second quarter of 2021.

The bigger picture: It’s cyclicals’ time to shine.
This year’s US stock market rallies have generally been caused by a handful of Big Tech names, but this latest move higher has instead been driven by “cyclicals”: stocks that are sensitive to the economy and tend to do well when a recovery’s on the cards. That explains why European stock markets – which aren’t particularly tech-heavy – outperformed their American rivals, and why the rally’s benefiting a bigger selection of companies: 467 stocks in the main US stock market rose in November – the most since April.

You might also like: How to outsmart the markets like BNY Mellon.

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🙋 Ask a question

2. Analyst Take

Could Climate Change Actually Make The World Richer?

What’s Going On Here?

The world is getting hotter, and newly released research from Oxford Economics’ James Nixon suggests some countries might want to keep it that way.

Here’s why: cooler places in northern Europe or North America may get an economic boost from, say, more amenable crop-growing conditions.

That might limit their desire to take action – even as the complete opposite happens to warm countries like India or Nigeria.

In fact, that shift could reduce those countries’ levels of economic activity by as much as 15% by 2050.

So there’ll definitely be winners and losers from climate change in the years ahead, and James will tell you where to look for them in today’s Insight.

Get the full Insight here

🤓 Not that kind of Square

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

Square offers 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 isn’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 has 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.

Yaaaaaas Queen

What’s Going On Here?

According to a new report from investment bank Goldman Sachs, one ought to invest in the UK even though one knows Brexit is coming.

What Does This Mean?

Goldman Sachs reckons UK investments have a couple of big things going for them. For one, the firm is expecting the UK and European Union (EU) to finally reach a trade agreement in mid-December, which should give investors a bit more certainty about the country's relationship with European companies. And for another, it’s assuming vaccinations will be well underway by next quarter, and it's therefore forecasting better economic growth for the UK than most other analysts are.

Why Should I Care?

For markets: Cheap and cheerful.
Goldman Sachs is particularly keen on the British pound, as well as the stocks of companies that stand to benefit from it: think any that sell to the UK itself, like homebuilders and national banks. But frankly the country’s entire stock market looks cheap compared to others across the globe, says the firm. That’s partly because it’s heavily skewed toward companies in the energy and financial sectors – both of which have underperformed this year – and partly because investors have been shunning British assets until the one-two punch of Brexit and coronavirus starts to heal.

The bigger picture: Beat you to it.
Looks like Goldman was right to assume vaccinations would be on their way soon: the UK became the first country to authorize the Pfizer-BioNTech vaccine for emergency use on Wednesday, with the rollout due to kick off next week. The US might not be far behind, while the EU’s regulator – which threw some shade at the UK by saying that a longer procedure was more appropriate – is shooting for the end of this month.

You might also like: Three reasons UK stocks could do so well out of the global recovery.

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🙋 Ask a question

💬 Quote of the day

“Everyone has talent. What is rare is the courage to follow the talent to the dark places where it leads.”

– Erica Jong (an American novelist, satirist, and poet)

Tweet this

Process payment rectangles with Square 💳

If you’re running a business, you know that accepting paper and plastic is important. Credit card payments might look more complicated than cash, but processing them doesn’t have to be. At least not with Square.

Their point of sale has everything you need and nothing you don’t. No unnecessary clutter, no hidden fees, and no long-term contracts. You only pay when you make a sale. Simple.

That also means it’s easy for everybody to use – not just brain surgeons and rocket scientists. Although those clever cookies are probably part of the two million businesses that run on Square’s point of sale, just saying.

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📚 What we're reading

Ditch your beard, get a sandwich (CNN)
Let’s make Zoom better (Aeon)
What is… outside? (Vice)

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Image credits: Pipochka, Nomad_Soul, Luis Carlos Torres - Shutterstock | B-D-S Piotr Marcinski, Andrey_Popov - Shutterstock Julian Calder for Governor-General of New Zealand

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Finimize - 😭 Stocks ruin Christmas

Today's big stories

Bumpy Ride

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Could Climate Change Actually Make The World Richer?

🤓 Not that kind of Square

Yaaaaaas Queen

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Process payment rectangles with Square 💳

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🎄 Best Buy brings tidings of despair

🎉 Meet our Next Gen Investor Summit speakers

👋 Meet the Finimize analysts

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