It's Breaking Finance's first edition of the News Reel! Find out the most important market news and updates for the upcoming week each Monday along with major breaking news and analysis as it happens!
We will display major headlines and an excerpt from a reputable news source with a link to the full article, if we have a strong view point we will also include a clearly marked "Our Thoughts" section which will be purely our opinion. We may also post own headline going over market or company facts without quotations or links.
PayPal Expands Crypto Offering in the UK
"PayPal will now allow users outside the U.S. to buy, hold and sell cryptocurrency for the first time. The company announced today the launch of a new service that will allow customers in the U.K. to select between four types of cryptocurrencies — including Bitcoin, Ethereum, Litecoin and Bitcoin Cash — which can be purchased using a connected bank account or debit card." - read more on TechCrunch here
Our Thoughts: The global adoption of crypto is continuing as more and more "fintech" companies offer services globally. This comes as Coinbase (COIN) also announced a $500M purchase along with investing 10% of its future profits into crypto. This bodes well for the continued strength of crypto prices that we have seen this year.
Tesla's Stock (TSLA) Continues Outperformance after "AI Day"
Tesla shares are above $700 again after its "AI Day" showcasing progress in full self driving, Dojo super computer, chip design, and robotics. Last week it had hit a low of $648 prior to the event.
Our Thoughts: Tesla's AI Day demonstrated the strength of Tesla's AI, software, computer engineering and robotics teams. While the purpose of the event was recruiting, it also gave investor's a view of their progress with full self driving and the difficulty of this real world AI problem. It also provides further evidence of Tesla as far more than just an auto maker, as its technology teams rival most of the world's tech giants.
The "Gig-economy" Suffers a Blow (Uber, Lyft, DoorDash etc.)
"A California court ruled on Friday that Prop 22, a ballot measure that exempted gig workers from state labor law, was unconstitutional. The move is a blow to gig economy companies, including Lyft, Uber, Instacart and DoorDash, which spent more than $200 million to support the ballot in an effort to maintain their current business models. Classifying drivers as contractors allows the companies to avoid the costly benefits associated with employment, such as unemployment insurance." - read more on CNBC here
Our Thoughts: The short to medium term risks for "gig economy" firms remains how their business models will be regulated in the long run. However, once regulations are modernized (even if they are not fully favorable to these tech companies), they will be able to adjust their pricing to cover worker benefits as Uber has done in the UK. The larger more established players will be able to absorb these costs better than smaller rivals, and in the long run these massive networks should prove profitable.
Canadians Paid off Record Amounts of Debt During Pandemic
"Statistics Canada says households paid down a record amount of non-mortgage debt in the first year of the pandemic as mortgage debt climbed by even more. The agency says from the onset of the pandemic to January 2021 that non-mortgage debt fell by $20.6 billion, including a $16.6-billion drop in credit card debt. Households were carrying about $2.5 trillion in outstanding debt one year into the pandemic, approximately two-thirds of which was mortgage debt." - read more on Yahoo here
Our Thoughts: Stories similar to this have been coming out all year regarding record amounts of saving, investing and debt reduction during the pandemic in both Canada and the US. These support the theory of a strong post pandemic recovery for the economy as consumers are flush with cash as well as increased capacity to borrow.
Canadian National Bank Joins Wealthsimple in Offering $0 Trades
"National Bank of Canada is set to become the first large Canadian lender to do away with trading fees for its direct investing platform. In Canada, Wealthsimple Inc. offers zero-commission trading, while the largest online trading platform not affiliated with a bank, Questrade, charges a commission starting at $4.95 a trade." - read more on BNN here
Our Thoughts: This is great news for Canadian individual investors, especially those with less money to start off their investment journeys as fees can really hinder performance early on. As technology improves and competition rises more and more brokerages will reduce their trading fees.
Major Earnings This Week
Monday August 23:
Dye & Durham (TSX: DND): Expected Q4 earnings of $0.19 per share
JD.com (JD): Expected Q2 earnings of $2.35 per share
Tuesday August 24:
Bank of Nova Scotia (BNS): Expected Q3 earnings of C$1.90 per share
Bank of Montreal (BMO): Expected Q3 earnings of C$2.94 per share
BestBuy (BBY): Expected Q2 earnings of $1.85 per share
Wednesday August 25:
Royal Bank of Canada (RY): Expected Q3 earnings of C$2.69 per share
Salesforce (CRM): Expected Q2 earnings of $0.91 per share
Thursday August 26:
CIBC (CM): Expected Q3 earnings of C$3.42 per share
Dell (DELL): Expected Q2 earnings of $2.03 per share
TD Bank (TD): Expected Q3 earnings of C$1.92 per share
Major Expected IPOs This Week
Wednesday August 25th:
Rocket Lab's SPAC merger completes, ticker VACQ becomes RKLB
See you next week!
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