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Premium Income Investments is a free weekly newsletter that discusses interesting ways to generate alpha in the market. It ranges from value investing, quantitative analysis, technical analysis, and even dabbles in a bit of crypto. If you are looking for a fun and easy way to digest some of the trending financial concepts and investing strategies, give the Premium Income Investments newsletter a try!
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Tesla turns up heat on rivals with global price cuts (4 min read)
Tesla has slashed prices on its vehicles globally by as much as 20%. The move was a reversal from the company’s strategy over the past years, when orders exceeded supply. Analysts see the price cut as a clear shot at rivals that have been aggressively ramping up EV productions. The discount may expand Tesla’s affordability and qualify for rebates in certain countries. However, some investors worried that it might erode bumper margins, even if it boosts sales volumes.
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Bed Bath & Beyond in Talks to Sell Assets (3 min read)Bed Bath & Beyond is in talks with a private equity firm to sell assets as part of a possible bankruptcy process. Among the assets in discussion, Buy Buy Baby has had the lowest decrease in sales as it maintained a strong position in a clearly defined market. Selling it would be difficult because creditors might resist losing the company’s most valuable entity. Shares of Bed Bath & Beyond fell 30% on Friday after retail traders tripled its price over the last several trading sessions.
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Yellen warns of U.S. default risk by early June, urges debt limit hike
US Treasury Secretary Janet Yellen said the US will likely hit the statutory debt limit by Jan 19, forcing the Treasury to use extraordinary measures to prevent default until early June. She urged Congress to act quickly to increase or suspend the debt ceiling because failure to do so could harm the US economy and global financial stability. US Treasury bills maturing in the second half of 2023 are trading at a premium, which may be tied to elevated default risk.
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China’s imports, exports plunge in warning sign for economy (2 min read)
China’s exports fell 9.9% year-over-year in December, their fastest pace since early 2020. Imports also fell sharply at 7.5% from a year ago. It shows that the world’s second largest economy is still struggling to recover after years of strict zero-Covid restrictions. An economist thinks that China’s outlook for exports remains weak due to slowing global growth and consumer shift from goods to services. The US import ban on advanced chips and equipment will also likely be a drag.
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Matthews Asia Adds EM ex-China ETF (3 min read)
Matthews Asia launched the first actively managed emerging market ETF that excludes China. The Matthews Emerging Markets Ex China Active ETF (MEMX) invests in companies that the fund’s managers believe will likely provide sustainable growth based on fundamental data. China dominates the emerging market and has dragged the region’s return last year due to zero-Covid lockdowns. An ex-China EM ETF gives investors the option to include or exclude China in their portfolio.
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Recent Canadian investment product news (1 min read)
Evolve ETFs recently launched two covered call index ETFs on Canada’s TSX exchange. ETSX uses the TSX 60 as the broader index, while ESPX uses the S&P 500. Both ETFs can utilize up to 33% of the portfolio to write covered call options. Evolve plans on launching mutual fund series for each ETF as well. The firm expects covered call funds will continue to attract assets this year as investors look for strategies that can help cushion some downside risk.
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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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