What You Need To Know This Week — March 30th, 2019
WHAT YOU NEED TO KNOW THIS WEEK
A weekly recap to keep you informed on the most important events this week impacting markets, business, tech and the global economy.
CANADIAN YIELD CURVE INVERTS, FOLLOWING THE U.S.
The Canadian 10-year government bond yield dipped below that of the 3-month Canadian treasury bill yield, indicating an inverted yield curve for the first time in 12 years. The 3-month yield has risen given the Bank of Canada’s previous rate hikes, while the 10-year yield has declined due to weakening economic data and lower expected growth. What are the implications? First, a heightened risk of recession in the near-term. Second, an increased likelihood of future interest rate cuts from the Bank of Canada.
SCHWAB DEBUTS SUBSCRIPTION-BASED FINANCIAL ADVICE FOR $30 PER MONTH
Discount brokerage firm Charles Schwab launched a shot across the bow for financial advisors by offering its Schwab Intelligent Portfolios Premium service, which includes portfolio management and unlimited financial planning, for $30 per month. This service, which includes unlimited service from a certified financial planner, breaks the traditional mold of a 1% flat advisor fee by dramatically undercutting it with a subscription model.
LYFT GOES PUBLIC. SHARES CLOSE UP 8.7%
Ride hailing company Lyft went public on the Nasdaq amid voracious demand from investors. The shares rose 8.7% on their first session of trading. The stock IPO’d at $72, up from an initial range of $62-$68 per share. The deal was oversubscribed in just two days into its roadshow, indicating tremendous investor interest in unprofitable, high-growth startups. Clearly, the IPO window is wide open. Look for additional “unicorn” startups to come public soon.
APPLE SHOWCASES OFFERINGS IN TV, FINANCE, GAMING AND NEWS AS COMPANY PUSHES ITS SERVICES
The iPhone maker, intent on capitalizing on the billion+ Apple devices in consumers’ hands, showcased its expanded services offering which included new products for entertainment, financial services, news and video games. Since sales of the iPhone have slowed, Apple has been seeking new areas of growth. Will consumers be as keen for these services as they are about their beloved iPhones?
BREXIT DAY PASSES WITH NO BREXIT
March 29, 2019, was the date that the U.K. was supposed to leave the European Union. But the country’s exit from the EU remains mired in a dysfunctional quagmire. British lawmakers can’t seem to agree on anything, and even voted down eight different proposals for various Brexit options. The result? Nothing but a public, national embarrassment. The U.K remains in the EU for now.
RECOMMENDED ARTICLES, PODCASTS, BOOKS AND TWEETS
Listen to market strategist Michael Mauboussin discuss four sources of alpha on “Invest Like the Best”.
Softbank’s Masayoshi Son missed out on buying a third of Amazon by $30 million in its early years. Son offered Amazon CEO Jeff Bezos $100 million but Bezos wanted $130 million. Unfortunately Son didn’t have the money. That stake would be worth more than $100 billion today.
U.S. GDP actually grew only 2.2% annualized in the fourth quarter. This was revised down from a previously estimated 2.6% growth rate.
The Fed’s Neel Kashkari indicates that the Fed may have tightened policy too far.
A profile of the secretive, $50 billion quant hedge fund DE Shaw.
Instead of turning to flaring, some oil and gas companies are utilizing their natural gas to power bitcoin mining rigs.
Eduardo Saverin, a cofounder of Facebook, did his first interview in seven years, highlighting his new venture capital firm.
Private equity firm Onex acquires hedge fund manager Gluskin Sheff for almost $500 million.
-The Accelerate Team
