Why Shopify’s New Pricing Plan Is Driving the Stock Higher (2 min read)
Shares of Shopify rose more than 10% on Wednesday after it announced an across-the-board price increase. It will be hiking monthly plan prices for all merchants at every level by an average of 33%. Shopify justified the price increase by pointing out that it has remained largely unchanged in the last 12 years. From an investor perspective, although raising prices is not going to be a popular move, it will help Shopify better prepare for growth in the years ahead.
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Tesla reports record revenue and beats on earnings (2 min read)
Tesla reported earnings higher than estimates and its revenue grew 33% from a year ago. However, automotive margins came in at 25.9%, the lowest in the last five quarters. Its vehicles’ average sales price has been trending downwards for many years, but Tesla said affordability would be necessary for them to sell multiple million of cars annually. Earlier this month, Tesla also reported vehicle delivery and production numbers that set a new record for the company.
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Bank of Canada hikes rates, becomes first major central bank to signal pause (3 min read)
The Bank of Canada hike rates by 0.25% on Wednesday, bringing the key interest rate to 4.5%. The central bank has lifted rates at a record pace of 4.25% in 10 months and is currently at the highest level in 15 years. Canada’s approach so far has matched the effort of the Fed’s rate hikes in the US. However, Canada became the first major central bank to say it would likely hold off on further increases in the coming months as the country’s inflation is beginning to slow.
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Goldman Sachs says even a near-default on US debt could spark a recession (4 min read)
The US hit the debt ceiling last week, forcing Treasury Secretary Janet Yellen to use extraordinary measures to avoid a default until early June. Goldman Sachs said even a near default could cause a recession. If Congress fails to lift the debt ceiling in time, investors will worry there is a chance of a missed payment on US Treasuries, which are an important asset to the global economy. Goldman is still bullish on the US economy and believes in a soft landing, but the debt crisis is the key to that optimistic outlook.
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Passive US funds poised to overtake active (3 min read)
Index funds are estimated to control more than half of the US fund's assets by 2027. Active funds shares in the US will fall from 53% in 2022 to 44% in five years, with most of the market shares expected to go in index funds. The reason for the shift from active to passive is because investors are starting to embrace model portfolios and index funds are more suitable for this approach to building a managed collection of assets.
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2 ETFs That Can Set You Up for Life ( 4 min read)
The biotech and robotics industry will likely grow rapidly in the next decade as it continues to explore ways to make meaningful impacts on our everyday lives. This article from Motley Fool highlighted the SPDR S&P Biotech ETF (XBI) and the Robo Global Robotics and Automation Index ETF (ROBO) to capture the growth potential in both industries. XBI and ROBO are one of the largest in their respective categories and have a decent track record to look back to.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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