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Today's big stories

Procter & Gamble released better-than-expected earnings, but its stock has been falling out of favor
Our analyst thinks it's nuts you still think Apple is a good investment – Read Now
Morgan Stanley’s results were better than expected, and it could have the edge on its rivals too

Smooth Moves

What’s Going On Here?

Procter & Gamble (P&G) is all spruced up with nowhere to go: the owner of Gillette, Pampers, and Pantene released better-than-expected earnings on Wednesday.

What Does This Mean?

There’s not exactly much to spend money on outside the house right now, so it looks like everyone’s been treating themselves to premium products they can enjoy between their own four walls. And that’s what P&G does best: the consumer staples company saw an 8% uptick in sales last quarter compared to the same time the year before, thanks in large part to the popularity of its shaving, styling, and cleaning products.

P&G doesn’t think demand’s going away anytime soon either: the days of panic-stockpiling are over, sure, but shoppers aren’t likely to be quite so relaxed about hygiene ever again (tweet this). The company’s so confident people aren’t going to wash their hands of, uh, washing their hands, in fact, that it upped its full-year earnings forecast.

Why Should I Care?

Zooming out: Old habits die hard.
Investors don’t necessarily share P&G’s can-do attitude: they’re concerned that pandemic-driven consumer habits – working from home, binge-watching movies, and online shopping – might scale back when the world opens up again. But at least it’s not just P&G they’re keeping a skeptical eye on: they’re just as suspicious of tech, streaming, and parcel delivery firms’ recent successes too.

The bigger picture: A bit less “Gamble”, a bit more “play it safe”.
Despite its surge in sales last year, P&G didn’t see its shares rise as much as the overall US stock market. That might be because it’s a “defensive” company that tends to see pretty stable demand no matter how the economy’s doing. That means it usually outperforms other stocks during market crashes – like it did last March – but lags behind them when investors see better days ahead – like it has since the vaccines were announced in November.

You might also like: How P&G can help you recession-proof your portfolio.

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🙋 Ask a question

2. Analyst Take

You’re Not Still Into Apple, Are You?

What’s Going On Here?

Apple’s limbering up to deliver its latest earnings update, and hopes – as always – are high for the most valuable public company in the US.

But here’s a hot tip: pay more attention to what the tech giant doesn’t say than what it does.

Because odds are, it’ll say new iPhone sales have been good overall and that China’s looking particularly strong at the moment.

What it probably won’t admit to is that it’s been cutting production of its more expensive iPhones.

And there’s the rub: sales of Apple’s high-end iPhones still seem to be getting weaker and weaker, even though it launched new models in October.

Its moderately successful subscription services – Apple Music and Apple TV – aren’t likely to make up for it anytime soon, either.

Which begs the question: how can this company be worth $2 trillion?

That’s today’s Insight: why Apple’s valuation is so flawed, and why you need to be aware of it. A $2 trillion company, after all, has a big impact on markets whether you’re invested or not…

Read or listen to the Insight here

🏃‍♂️ How to put a spring in your step

When you ask yourself “What shall I invest in next?”, joint replacement tech probably isn’t the first thing that springs to mind.

But like any other market, it’s ripe for disruption – and Monogram is doing just that.

Monogram is the first company to market with a navigated robot arm creating personalized, 3D-printed orthopedic implants – and it’s looking for your investment.

See, orthopedic tech has stayed much the same for the last 50 years.

But the joint replacement market is worth $19.6 billion, with over 1 million knee replacements in the US annually. That’s expected to be at 3.5 million by 2030.

And by 2027, around 50% of all knee procedures will be robotic – up from 11% in 2019.

That sort of growth is hard to come by: find out more about Monogram, and join the thousands of investors who have already invested.

Find Out More

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Hot Shot

What’s Going On Here?

Those retail investors Morgan Stanley’s been picking up have a real kick to them: the investment bank announced better-than-expected results on Wednesday.

What Does This Mean?

After tearaway earnings from JPMorgan Chase and Goldman Sachs in the last week, expectations for Morgan Stanley were high. But the bank duly knocked them out of the park: its bottom line got a boost from the surge of investors who piled into the pandemic-shaken markets, as well as from the sheer number of initial public offerings it was paid to advise on. Its wealth management division – which looks after money for the uber-rich and tends to be the most stable of its businesses – did better than expected too. That might’ve come as a relief to investors: it accounts for a massive 42% of its revenue.

Why Should I Care?

Zooming in: Me, me, me*trade.
One reason the bank’s wealth management business is doing so well is E*Trade – the retail trading platform Morgan Stanley acquired in February last year to compete with the likes of Robinhood. Retail trading is big business right now, and it’s easy to see why: the stock market’s high-profile hardships last year suddenly turned everyone – maybe even you – into an armchair investor.

The bigger picture: Bank eat bank.
Morgan Stanley says that the bigger its wealth management business grows, the more profitable its overall business should become. And since that segment’s on the up and up, the company just upped its long-term “return-on-equity” target – a key metric used to judge banks’ profitability – from 15-17% to more than 17%. That’s a subtle shift, but it puts the bank at the upper end of Goldman Sachs and JPMorgan’s own projections – which could make all the difference to investors.

You might also like: How to pick the best banking stock.

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🙋 Ask a question

💬 Quote of the day

“True friends are those who really know you but love you anyway.”

– Edna Buchanan (an American journalist and writer)

Tweet this

Keep your house in order with Hammock

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Take advantage of their 30-day free trial to see for yourself.

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🤔 Q&A · RE: Road Trip

“Why was the Federal Reserve’s (the Fed’s) decision to buy investment-grade corporate bonds last March so important?”

– Angelo

“You’re right, Angelo: it wasn’t exactly a typical move for the Fed. But it’s all to do with keeping the right balance between buyers and sellers in the market, as well as helping companies themselves recover more quickly. See, one of the Fed’s goals is to keep the country’s financial markets – and by extension, the economy – ticking over. And when things turned sour last March, there were so many people selling their corporate bonds that it was hard to find buyers. So by becoming a buyer itself, the Fed encouraged everyone to keep trading and, in turn, kept markets steady. There was also another positive side-effect: the move boosted demand for those bonds, pushing their prices up and yields down. That made it cheaper for companies to borrow and helped speed up their recoveries. The stance has come in for some criticism, mind you: the Fed bought bonds from giants like Apple and Microsoft, which didn’t exactly need the help…”

🙋 Ask a question

🌎 Finimize Community

🏀 Maxin’, relaxin’, shootin’ some B-ball

Max Rofagha, our founder and CEO, wants to get to know you. He wants to find out what you like about Finimize, what you’re not so keen on, what motivates you as an investor, and probably where you got that table lamp in the background of your Zoom call too. Don’t miss the first of our monthly half-hour conversations with the head honcho himself on January 29th.

🤖 The Opportunity for Autonomous Tech: 1pm New York Time, January 27th

💪 Live Q&A with Finimize CEO & Founde r: 1.30pm UK Time, January 29th

🚀 Future of Fintech in Latin America: 6pm UK Time, February 2nd

📚 What we're reading

Elon Musk is a… cat murderer? (Insider)
How to accidentally become a bitcoin multimillionaire (Mel)
The politics of veganism (Eater)

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Finimize - 🤭 Apple ain't worth $2 trillion

Today's big stories

Smooth Moves

What’s Going On Here?

What Does This Mean?

Why Should I Care?

You’re Not Still Into Apple, Are You?

🏃‍♂️ How to put a spring in your step

Hot Shot

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Keep your house in order with Hammock

🏀 Maxin’, relaxin’, shootin’ some B-ball

Older messages

😮 US banks.

🤓 How to trade this earnings season

💰 9 trillion.

✌️ #startuplife

😭 Intel finally admits defeat

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