HSBC selling its Canadian division to RBC for $10 billion (4 min read)
HSBC has agreed to sell its Canadian business to RBC for C$13.5 billion in cash. Regulators will review the deal and if successful, it will be the first big banking merger in Canada in a decade. The deal will boost RBC’s assets by C$134 billion and add about 130 new branches, consolidating its leading position among top banks. HSBC said it may return some of the proceeds to shareholders via a one-off dividend. HSBC’s shares closed up 4% after the news.
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Tesla’s US market share is eroding as cheaper EVs arrive (3 min read)
Tesla is still the top selling EV brand in the US but the growing number of affordable models from rivals are starting to reduce Tesla’s dominance. A report by S&P Global Mobility found that Tesla’s EV market share in the US was at 65% in Q3, down from 71% in 2021 and 79% in 2020. The drop in market share was expected but the rate of the decline may be concerning to investors, especially amid Elon’s distraction with Twitter and half of the company’s value gone this year.
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S&P 500 and Nasdaq closed lower for the third day (2 min read)
The S&P 500 and Nasdaq struggled to recover the sharp losses from the previous day and hovered relatively steady on Tuesday as investors are waiting for data coming later this week. The JOLTS job openings on Wednesday and November payrolls on Friday will provide insights on how the economy is performing. Fed Chair Jerome Powell’s speech on Wednesday may also offer some clues on whether the central bank will remain a hawkish stance on rate hikes.
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Canada's economy likely stalled in October after Q3 beat (2 min read)
Canada's GDP grew at an annualized rate of 2.9% in Q3 which was above expectations. However, analysts pointed out that it looks a bit of a head fake as it mostly relied on external demand and volatile categories. The monthly data also showed Canada’s economy started Q4 on weak footing and signs of growth beginning to stall. Given these indications, the Bank of Canada may slow its rate hike campaign next week to an increase of 0.25%.
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Three reason why indexing works and continues to grow (17 min read)
This article republished a recent paper from S&P Dow Jones Indices on why indexing tends to outperform active managers most of the time. Active underperformance happens for a set of three reasons: professionalization, cost, and skewness. The paper goes into detail on how each reason affects performance in the long run. It also provides data supporting why those reasons are unlikely to reverse and the growth of indexing is set to continue.
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Bitwise Plans New Crypto ETF Amid Market Collapse (2 min read)
Bitwise Asset Management filed with the SEC to launch the Bitcoin Strategy Optimum Yield ETF (BITC). The new ETF aims to provide exposure to bitcoin futures contracts and investments in short-term debt securities. Bitwise manages other crypto related funds but most have lost roughly 85% in the past year along with the tumbling crypto market. The plan for the new launch shows their confidence in the future of digital currencies.
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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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