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Today's big stories

US mortgage applications shot up as homeowners took advantage of low interest rates
One simple, short-term strategy could be the perfect way to profit from this upcoming earnings season – Read Now
Retail giant Target reported encouraging holiday season sales growth

The Mort The Merrier

What’s Going On Here?

Data out this week showed applications to refinance mortgages rose 20% last week compared to the week before, as US homeowners scrambled to get ‘em while they’re cheap (tweet this).

What Does This Mean?

On the one hand, this data from the Mortgage Bankers Association is only to be expected: brokers take time off over the holidays, so the first week of the year is always busy. On the other hand, it’s pretty unique to the times we’re in: the jump coincided with an increase in the average interest rates of 30-year fixed-rate mortgages, as well as with 10-year US government bond yields rising above 1% for the first time since last spring. So the New Year’s busy, sure, but there were almost twice as many applications as there were this time last year…

Why Should I Care?

The bigger picture: Biden their time.
A new US government will take over next week, and investors are expecting more spending announcements not long after. So between those measures and potentially economy-stabilizing vaccine rollouts, there might soon be a boost in economic growth and inflation – and with it, interest rates. That would make borrowing money – mortgages included – more expensive. It might not happen particularly soon, mind you: data out on Wednesday showed inflation in December was in line with economists’ predictions.

For markets: Take stock.
Goldman Sachs reckons all this is bad news for stock prices in the short term – even though they hit new record highs last week. See, just the prospect of higher interest rates is enough to persuade government bond investors to sell off some of their holdings in hopes of buying new, higher-returning bonds in the future. That pushes bond prices down and yields up – and since US government bond yields are a key benchmark, other bonds’ yields rise too. In other words, it becomes more expensive for companies to repay their debts, potentially damaging their earnings and, in turn, their share prices.

You might also like: Is now the perfect time to buy a house?

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2. Analyst Take

The Trick To Boosting Your Returns This Earnings Season

What’s Going On Here?

This week marks the start of another earnings season, as companies let you in on how they did last quarter.

And with that comes one short-term strategy that could earn you some impressive returns – 12% on average – without costing too much.

It’s all to do with options, and there are a few reasons now’s such a good time to try it out.

For one, any strategy involving stock options looks attractive right now – mostly because “implied volatility” is low, bringing down the asset’s cost.

For another thing, analysts are actually quite pessimistic right now, clearing the way for more stronger-than-expected results than normal.

So that’s today’s Insight: how to put this strategy into action for yourself (it’s actually pretty simple), and Goldman Sachs’ picks for the stocks that could benefit most from it.

Read or listen to the Insight here

📈 Options trading, but not as you know it

If you’ve ever come across options trading, you’ll know how valuable a digestible, responsible options trading platform could be.

That’s exactly what Gatsby’s built – and you’re invited to invest in the company and be involved in its future success.

Because here’s the thing: the options market is growing at the rate of knots.

More than $14 trillion of options contracts were traded in 2019, and all early signs point to last year having shattered that.

Meanwhile, Gatsby’s user growth and revenue has outpaced its own projections every step of the way.

That might be why they’ve already raised over $2 million in funding less than a month after their online public offering.

This is one of those rare opportunities to buy into a really exciting company early on: head here find out more about Gatsby.

Find Out More

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Sweet Spot

What’s Going On Here?

It looks like Target’s been giving its customers everything they need to enjoy a very merry lockdown: the US retail giant announced impressive sales growth in November and December on Wednesday.

What Does This Mean?

Ecommerce was “Tarjay’s” pièce de résistance yet again, with online sales more than doubling in the last two months of 2020 compared to the same period in 2019. But the retailer proved itself elsewhere too: it saw almost 200% growth in its same-day pickup segment, and a more-than 4% rise in sales at stores that’d been open for at least a year. Throw in a 12% increase in the average customer’s spending, and Target’s sales were up over 17% during the holiday period.

Why Should I Care?

Zooming out: And now, we wait.
One of the biggest questions this year is whether the pandemic-driven tailwinds that have been driving companies like Target will start to peter out. There’s a risk that as more and more Americans are vaccinated, big-box retailers and ecommerce platforms will lose out to in-person shopping experiences like malls. All eyes will be on Target’s update in March, then, when we’ll see just how much of the market it thinks it’ll hang onto.

The bigger picture: Because the internet.
The ecommerce trend is benefiting companies across the Atlantic too: logistics firm Deutsche Post just reported record annual earnings partly thanks to the number of online orders it has to deliver, and it’s predicting it’ll do even better this year. Still, there are signs investors are worried about the strength of the trend: Just Eat Takeaway.com posted weaker-than-expected 2020 profit on Wednesday after reinvesting more than planned, and investors – concerned its reckless spending could cause problems when a vaccinated customer base starts relying less on takeout – ditched the food delivery company’s shares.

You might also like: How to transform these updates into the perfect stock picks.

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💬 Quote of the day

“I have never met a man so ignorant that I couldn’t learn something from him.”

– Galileo Galilei (an Italian astronomer, physicist, and engineer)

Tweet this

🐓 What the Flock?

So all this time stuck in your coop, just steps away from your kitchen, has left you feeling peckish all the time.

And hey, we get it: it’s easy to reach for a salty bag of chips or a bar of chocolate in such fowl times.

But instead of letting an unhealthy diet rule the roost, we recommend trying Flock chicken chips instead.

Not to crow on about them too much, but they are available in original, salt and vinegar, and BBQ flavors.

And if that doesn’t egg you on: with zero grams of carbs, zero grams of sugar, and 13 grams of high protein, you can feel completely guilt-free about it too.

They’re pretty plucking good: try Flock today.

Try Flock Today

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🤔 Q&A · RE: Grave New World

“What’s the difference between a company’s share price and its value?”

– Doug

“When people talk about a company’s value, they’re usually referring to its market value. That’s its total value, and it fluctuates daily if the company’s listed on the stock market. That figure is used to calculate the company’s share price: just divide the market value by the number of available shares. While we’re on the subject, it’s worth keeping in mind that since the number of available shares is entirely at a company’s discretion, its share price – whether it’s $10 or $10,000 – doesn’t actually indicate whether a stock is under- or overpriced relative to its earnings potential. To work that out, you’d need to analyze a company’s valuation ratios, which is a topic for another day.”

🙋 Ask a question

🌍 Finimize Community

🦇 Who needs Batman?

There’s a world of crime out there, and someone’s got to fight it. But why call the Caped Crusader when you have Knightscope’s autonomous security robots? They might not have a grappling hook, but they are single-handedly reducing crime across the States. If they, uh, had hands. Join us at our event with Knightscope’s CEO, and find out more about this glossy new sector.

📈 The Stock Market in a Post-Brexit Economy: 6pm UK Time, January 20th
🤖 The Opportunity for Autonomous Tech: 1pm New York Time, January 27th
🤠 Live Q&A with Finimize CEO & Founder, Max Rofagha: 1.30pm UK Time, January 29th
🚀 Future of Fintech in Latin America: 6pm UK Time, February 2nd

📚 What we're reading

Home of the free, land of the angry (GQ)
Sharks are coming for our internet (Slate)
It’s not too late to save ourselves (The Atlantic)

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Finimize - 🤓 How to trade this earnings season

Today's big stories

The Mort The Merrier

What’s Going On Here?

What Does This Mean?

Why Should I Care?

The Trick To Boosting Your Returns This Earnings Season

📈 Options trading, but not as you know it

Sweet Spot

What’s Going On Here?

What Does This Mean?

Why Should I Care?

🐓 What the Flock?

🦇 Who needs Batman?

Older messages

💰 9 trillion.

✌️ #startuplife

😭 Intel finally admits defeat

📱 Everyone wants an iPhone

🇺🇸 America gets a reality check

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