JPMorgan's going to feel this in the morning | The Great British Grocer Off |

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Today's big stories

  1. JPMorgan announced disappointing quarterly earnings
  2. The cybersecurity industry is growing rapidly, and there are a few stocks and funds you can invest in to take advantage
  3. UK grocery giant Tesco reported strong yearly results

Near Myth

Near Myth

Whatā€™s Going On Here?

JPMorgan reported worse-than-expected quarterly earnings on Wednesday, after the US bank was forced to go through the motions all over again.

What Does This Mean?

JPMorgan has spent the last few quarters funneling ā€œloan loss reservesā€ ā€“ funds it set aside in case pandemic-hit customers couldnā€™t pay their debts ā€“ back into its coffers. But last quarter, it had to rebuild a near-$1 billion pile of them, as inflation and higher interest rates caused the risk of defaults to rise. Those interest rate hikes did benefit the bank, in fairness: there was a 7% uptick in net interest income compared to the same time last year. But with revenue from investment banking falling by a worse-than-expected 28%, any positive sounds were drowned out: the bankā€™s overall profit fell by 42%. JPMorgan was cautious in its outlook too, and investors ā€“ unappeased by the approval of a $30 billion share buyback program ā€“ sent its stock down.

Why Should I Care?

The bigger picture: All banks for one, one bank for all.
Investors had already been anticipating that JPMorganā€™s investment banking revenue would drop off, as higher interest rates and lower stock prices deterred companies from striking deals and listing on the stock market. But its results also showed something unexpected: that the toll of loan loss reserves offset most of the benefit from higher interest rates. And since JPMorgan is the first of the big US banks to report its quarterly earnings, that could set the tone for whatā€™s to comeā€¦

Zooming out: Financial firms arenā€™t all in the same boat.
Some financial firms are going to be just fine: BlackRock ā€“ the worldā€™s biggest investment manager ā€“ announced on Wednesday that investors poured a net $114 billion more into its range of funds. And since it makes money from the fees charged on those investments, its profit jumped by a better-than-expected 18% compared to the same time last year.

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Analyst Take

How To Lock Down A Profit From The Cybersecurity Industry

How To Lock Down A Profit From The Cybersecurity Industry
Photo of Reda

Reda, Analyst

Whatā€™s Going On Here?

Word on the street is that cybersecurity firms are getting a lot of attention from Finimizers.

And itā€™s easy to see why: the Nasdaq CTA Cybersecurity Index has outperformed the S&P 500 by 12% over the past year, with five factors bringing attention back to the sector.

The Russia-Ukraine conflict has led to a spike in cyberattacks, for one, and experts are worried that battlefield hacks might accidentally ā€“ or deliberately ā€“ spill over to personal computers.

Plus, global spending on cybersecurity mergers and acquisitions grew more than 300% in 2021 from the year before, and all this dealmaking has been boosting valuations.

So thatā€™s todayā€™s Insight: why the cybersecurity industry is growing so fast, and the stocks and exchange-traded funds you can invest in to profit.

Read or listen to the Insight here

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Happy Hunting

Happy Hunting

Whatā€™s Going On Here?

Tesco posted strong full-year results on Wednesday, but the UKā€™s biggest supermarket chain has a target on its backā€¦

What Does This Mean?

The odds a grocery retailer would sustain its mid-pandemic momentum were slim, but Tesco has risen to the challenge: its sales are still going strong, while the cost of Covid-related cleaning and maintenance have been coming down. That led the retailer to deliver a pre-tax profit more than three times as high as the year before. Tesco is, of course, well aware that higher prices are eating into shoppersā€™ budgets, and itā€™s duly warned that this profit could drop off this year. But it has a plan to nip that in the bud: the companyā€™s looking to cut jobs and revamp overnight operations, all in view of saving around $1.3 billion over the next three years.

Why Should I Care?

For you personally: Rivalry is healthy.
Tesco has stiff competition in the form of German discount grocers like Aldi, which last month hit a record market share of the UK grocery market (tweet this). Thatā€™s put pressure on Tesco to protect its spot at the top of the food chain, which is no bad thing for you: itā€™s being forced to keep prices low to stay competitive, meaning itā€™ll absorb some of the record-high food costs rather than pass them on to you.

The bigger picture: Will it ever end?
Another day, another calamitous inflation reading: data out on Wednesday showed that UK consumer prices rose by a higher-than-expected 7% last month compared to the year before ā€“ a 30-year high. Prices were up in every category, with a quarter of them seeing lurches of more than 10%. Consider too that April is the first month where the government has lifted its energy price cap, and you can probably see where this is goingā€¦

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šŸ’¬ Quote of the day

ā€œWhenever you find yourself on the side of the majority, it is time to pause and reflect.ā€

ā€“Ā Mark Twain (an American writer, humorist, and entrepreneur)
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šŸŒ Finimize Live

šŸ„³ Coming up this weekā€¦

(All events given in UK time)

šŸ§  How To Master The Investor Mindset: 6pm April 13th
šŸš€ How To Invest In The Space Economy: 1pm April 14th
šŸš‘ How To Invest In Insuretech: 6pm April 14th

šŸ¤Æ And after thatā€¦

šŸ’° Understanding Use Cases To Generate Crypto Wealth: 6pm April 20th
šŸ‘·ā€ā™€ļø How To Protect Your Portfolio: 1pm April 21st
šŸ“ˆ How To Identify High-Growth Metaverse Stocks: 6pm April 21st
šŸŒ 2022 Macro And Fixed Income Opportunities: 1pm April 22nd
šŸŽ™ Live Crypto Community Q&A: 5pm April 22nd
šŸ’ø Top Crypto Investing Strategies: 5pm April 25th
šŸŖ An Impact Investorā€™s Guide to Web3: 6pm April 28th
šŸŽ™ Live Crypto Community Q&A: 5pm April 29th

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