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Hi John, here's what you need to know for December 6th in 3:14 minutes.

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• Slack’s stronger-than-expected quarterly update helped calm investors’ concerns about competition from Microsoft... for now
• Japan’s government announced major spending plans to boost its economic growth and avoid a recession

Slack Not Taken Up

What’s Going On Here?

Workplace chat app Slack reported earnings this week – and while it beat its forecasts, not all investors were on-message.

What Does This Mean?

Slack listed shares on the stock market back in June; in September, it posted a miserable outlook for the third quarter. But late on Wednesday the company managed to exceed those etiolated expectations: it only lost 2 cents per share, compared to the 8-cent loss analysts had anticipated.

But that wasn’t enough to please investors focusing on Slack’s updated forecast. The company said that losses for the current quarter might be higher than expected: it plans to spend over half its revenue on sales and marketing. Still, Slack comforted investors with the revelation that over the past year it’s added 20 customers paying it more than $1 million annually – which may be why the messaging service’s shares held steady.

Why Should I Care?

For markets: Old dogs can learn new tricks. Thursday’s share price reaction will be cold comfort to investors who’ve seen Slack’s stock fall 45% since June. One culprit may be Microsoft’s Teams platform, which has around twice as many users as Slack despite launching four years later. That’s largely thanks to Microsoft’s scale: Teams is included free for subscribers to its Office product suite. Slack might find it even harder to compete with the tech giant as time goes on – in tech, scale can count for a lot.

The bigger picture: You can’t please everyone. Another company struggling to please stock investors is Twitter: after enjoying a renaissance earlier this year, its shares have fallen 30% since September. But the social medium is getting a better reception in the bond market: it’s issuing $600 million of them this week amid high demand. Bond investors care less about growth potential than stock investors, focusing instead on the stability of a company (and whether it can pay back its loans). Twitter, which is profitable and has plenty of cash on hand, fits the bill perfectly.

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Land Of The Rising Sum

What’s Going On Here?

Japan’s economy got a Godzilla-sized goody bag on Thursday as the country’s government announced $121 billion in additional spending – but things are getting a little too hot in India.

What Does This Mean?

The Japanese economy has been growing at a minuscule rate in recent years – but with slumping exports exacerbated by a sales tax hike and damage from Typhoon Hagibis, it’s expected to shrink 2.7% this quarter. To avert a recession, the government has decided to turn on the taps and increase spending on infrastructure and technology – a return to the “Abenomics” of the early 2010s.

Japanese leaders hope the “stimulus package” will add 1.4 percentage points to economic growth. But investors aren’t so sure: one analyst expects a boost of just 0.2 percentage points in the coming year.

Why Should I Care?

For markets: Pass the parcel.
These “fiscal” economy-boosting measures are distinguished from “monetary” policy, where central banks cut interest rates to encourage consumers and businesses to spend. With Japanese rates already at -0.1%, the central bank has run out of options – so it’s up to the government to get things back on track instead. Japan’s not the only place this is happening: over in Europe, the central bank is encouraging governments to break out their checkbooks too. All this extra cash could be a windfall for companies working on the new infrastructure projects…

Zooming out: Crying over onions.
India’s central bank also asked the government to help out on Thursday – but for a different reason. It dashed expectations of a cut to its target interest rate due to worries about food-driven inflation: in November, onion prices alone were an estimated 150% higher than the same time last year (tweet this). Resulting protests made the authorities wary of pushing up prices further through cheaper borrowing. It’s a problem other countries may soon face: on Thursday, the United Nations reported that average world food prices hit their highest point in over two years.

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