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Today's big stories

The US economy added fewer jobs than expected in January, and the future’s looking bleak
Goldman’s laid out a shortlist of British stocks that could benefit most from the country’s surprisingly rapid vaccine rollout – Read Now
Snap and Pinterest both reported better-than-expected results, but the companies have very different roads ahead of them

Diary Intolerant

What’s Going On Here?

Please, no more free time: fresh data out on Friday showed the US economy only added a worse-than-expected 49,000 new jobs in January (tweet this).

What Does This Mean?

So let’s start with the monthly report’s good news: the unemployment rate fell to 6.3%, below economists’ 6.7% estimate. Now for the bad: that was mostly down to a drop in the proportion of people who are either working or actively looking for a job – i.e. the “participation rate”.

There were job losses too, particularly in the hospitality and retail industries given the end of the holiday season and winding down of retail mania. That seasonal swing usually makes January a tricky month when it comes to interpreting jobs data, but revisions to previous reports – which saw almost 160,000 jobs cut from the last two months’ totals – left little doubt about it: the US economy is in freefall.

Why Should I Care?

For you personally: Prepare to spend your stimulus check.
Employment reports give an almost real-time temperature check on how the “real economy” is doing, and last week’s frosty update suggests America is in need of a hot cup of Joe. And that’s exactly what it's getting: the US president’s $1.9 trillion spending plan took a big step forward last week, and a direct cash payment will probably warm the cockles of your heart before much more damage is done.

The bigger picture: The future is bright(ish).
Investors, for their part, seemed to shrug off the jobs report: they continued to buy up US stocks and drove the S&P 500’s best week since November. That might be because they’re looking past the immediate disruption, and instead focusing on a time when enough Americans are vaccinated against coronavirus. That probably won’t be until the end of this year, mind you, and impatient investors won’t take kindly to any delays.

You might also like: Three steps to manage your debts when your stimulus check arrives.

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🙋 Ask a question

2. Analyst Take

British Stocks Are Ready For The Recovery

What’s Going On Here?

The UK’s in a tough place: fresh restrictions on the back of late last year’s coronavirus resurgence have sent the country on the path towards a double-dip recession.

But that’s no reason to ignore investment opportunities there. Quite the opposite, in fact.

After all, Britain’s been ahead of the curve on vaccine distribution, and there’s been a big rise in the household savings rate too – so there’s cash just waiting to be spent.

And since 80% of the UK economy is services-driven, companies whose share prices are closely correlated with a key measure of business activity could do especially well.

And as luck would have it, Goldman Sachs has even created a shortlist of just those companies.

So that’s today’s Insight: which British stocks are going cheap right now.

Read or listen to the Insight here

And the crowd… goes… wild!

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Oh Snap

What’s Going On Here?

Snap Inc. and Pinterest both reported better-than-expected results late last week, but the companies’ futures have very different filters on them.

What Does This Mean?

There isn’t exactly much to do these days, and social media B-listers Snapchat and Pinterest have been happy to step into the void and pick up millions of new users. All those extra eyeballs made their platforms much more attractive places for advertisers to park their brands last quarter, which might be why Snap and Pinterest’s sales climbed 62% and 76% respectively compared to the same time the year before.

Still, there was one big difference between them: Pinterest’s expectations for this quarter topped analysts’ estimates, but Snap’s forecasts – hampered by recent privacy changes that'll limit its ability to target ads – came in well below.

Why Should I Care?

The bigger picture: It pays to stay above the drama.
There was another reason Snap’s outlook took a hit: advertisers have temporarily been halting campaigns to protest its role in exacerbating the Capitol riots. And it’s not the only platform shedding ad dollars: Facebook has lost the tailwind it gained from the US election, and Twitter’s decision to ban the former president might dent this year’s activity and, with it, ad revenue. At least Pinterest didn’t report any such worries: its users' zealotry is directed more toward macramé than insurrection.

Zooming out: What’s ByteDance waiting for?
Social media investors were treated to a new investment opportunity last week: Chinese video app Kuasihou made its debut on the Hong Kong Stock Exchange on Friday, and its shares nearly tripled. That put its value at $160 billion – not far off TikTok-owner ByteDance, which might now be more tempted than ever to list as well.

You might also like: How to react to surprise earnings updates.

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🙋 Ask a question

💬 Quote of the day

“Hope is tomorrow’s veneer over today’s disappointment.”

– Evan Esar (an American humorist)

Tweet this

🤔 Q&A · RE: New Release

Q: “What’s the benefit of a company having a high share price once it’s raised money via an initial public offering?”

– Elle in London, UK

A: “The best way to think about a company is like you would a country: its stock is its currency, and if things are going well, investors will move their money into and strengthen that currency, pushing its price up. That higher stock price then leads to a lot more financial flexibility. See, companies can sell shares to raise more money, and the higher the price of those shares, the fewer it’ll have to sell. And the fewer it has to sell, the smaller the drop in its share price. Alternatively, if a company wants to borrow money, it’s more likely to find willing lenders if it has a high share price – which suggests it shouldn’t have trouble repaying its debts.”

🙋 Ask a question

🌍 Finimize Community

🍷 Crypto’s aging like a fine wine

Digital currencies have been picking up a lot of fans in the institutional world, and plenty of investors are backing the market to climb on and on and on. Join experts from Diginex and EQUOIS on Thursday to find out if crypto can keep this up – and whether you’ve missed your chance to buy in…

✌️ Dimensional Investing vs ETFs: 9pm Singapore Time, February 9th
🛍 Investing in Retail Stocks: 6pm UK Time, February 10th
🤖 What’s next for Crypto?: 9pm Hong Kong Time, February 11th
🍃 Key ESG Trends for 2021: 6pm UK Time, February 16th
🎈Navigating a Stock Market Bubble: 1pm UK Time, February 17th
👦 The Millennial Effect: 6pm UK Time, February 17th
🎮 Esports ETFs with VanEck: 6pm UK Time, February 22nd
🙋 Developing a Framework to Invest in Women: 6pm UK Time, February 25th
🌈 Financial Planning for the LGBTQ Community: 2pm NYC Time, February 26th
💪 Q&A with Finimize CEO, Max Rofagha: 1.30pm UK Time, February 26th

📚 What we're reading

How to reopen a school in a pandemic (Vox)
McDonald’s is trying to crack the vegan market (Detroit News)
Teens are putting us all to shame (Space)

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Finimize - 📉 This is America

Today's big stories

Diary Intolerant

What’s Going On Here?

What Does This Mean?

Why Should I Care?

British Stocks Are Ready For The Recovery

And the crowd… goes… wild!

Oh Snap

What’s Going On Here?

What Does This Mean?

Why Should I Care?

🍷 Crypto’s aging like a fine wine

Older messages

💡 Six bright ideas for 2021

😭 There are no PS5s left

😨 Jeff Bezos is calling it quits

🧐 Redditors are back at it

😬 5G did it

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