Here’s how Peloton CEO Barry McCarthy’s turnaround plan is going (4 min read)
Peloton’s share price fell nearly 20%, erasing most gains it made yesterday from news on the Amazon deal, after the company reported a big loss of $1.2 billion from last quarter and a discouraging fourth quarter. The company is moderating its cash burn but does not expect to reach a break even point until mid 2023. CEO Barry McCarthy said he did not know how deep some issues were before taking on the role. His plan to turn this around is to cut costs and expand on higher margin subscriptions. The three things they are testing to win customers back - fitness as a service, growing the digital app, and a freemium model.
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Even dollar stores are starting to feel the pinch from inflation (3 min read)
Dollar General (DG) and Dollar Tree (DLTR) have reported an increase in sales last quarter due to inflation driving consumers to go for more inexpensive products. However, the dollar stores have raised concerns of the impact inflations might have on their business in the near future. Majority of the sales are in the needs-based products like food or beverages that they already have a low margins on. As inflation is also affecting their suppliers, it might thin the margins ever further. Dollar General is doing slightly better than Dollar Tree with sales increased by 9% from a year ago while the latter increased by 6.7%.
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GDP shrank at revised 0.6% rate in second quarter, signaling US remains in technical recession (3 min read)GDP in the second quarter shrank by 0.6%, slightly lower than the 0.9% previously reported. The revised rate came from better consumer spending data. This is still a technical definition of a recession as the GDP is negative for two consecutive quarters but the National Bureau of Economic Research (NBER) has not confirmed it. The NBER says that it relies on more than just the GDP to determine whether an economy is in a recession or not. This report could affect the Fed’s decision on the size of the next rate hike.
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Meet a New ETF Provider: DoubleLine (2 min read)
DoubleLine entered the ETF market earlier this year with the launch of the DoubleLine Schiller CAPE U.S. Equities ETF (CAPE) and the DoubleLine Opportunistic Bond ETF (DBND). DoubleLine has a long established track record in the active mutual fund industry and is very well known in the fixed income space. The move into the ETF market was because of increasing demand from clients preferring the ETF structure and ecosystem. More details about the two ETFs launched by DoubleLine are available in this article.
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Do You Know What's In Your Thematic ETF? (3 min read)
Smart beta ETFs are now roughly 34% of the total US listed equity ETFs. Traditional beta ETFs are market-cap weighted and index based. Smart beta ETFs on the other hand are essentially thematically weighted and vary depending on the factors used to construct the ETF. It could be any quantitative factors such as not including dividend stocks or only select stocks with lower volatility than the broader market. The type of factors used can significantly impact how it performs during different market cycles and where it fits in an investor’s portfolio.
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Kevin O'Leary Says This Move Is the Key to Financial Success (2 min read)
Kevin O’Leary said the key to financial success is to pay off debts as soon as possible. To help pay off debts faster, Kevin recommends first finding out how much you are paying on what types of debt and make sure to stick to it until all is paid off. Then try swapping the more expensive debt into a less expensive one like moving a credit card balance to a new card with a lower interest rate. The less you spend on paying debts, the more you have to save and invest, the more likely you can reach your financial success.
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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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