Hippity Hop

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  • March 20, 2023

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January 15, 2023
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Hi, Financial Friends!

Use the power of psychometrics to your advantage by harnessing your power as an investor! Start your journey today and join an Investment Faction for free by completing the Discovery Survey and see where you rank compared with other investors in North America.

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The Big North-American Market Dinos (BMD)

Hot Start

Source: Google Finance​

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The Toronto (Stock-Exchange): the Centre of the Universe

After a disappointing December, Canada’s main stock market index, the S&P/TSX composite bolted out of the gate to start 2023. The index ticked up every step of the way this week and is now up over 4.7% year-to-date thanks to strong performances in the heavyweight energy and tech sectors. It’s far too early to be jumping to conclusions for the year, but there’s nothing wrong with starting off with the right cheese – speaking of which – you can inspire yourself with this cheezy stock market explainer: STOCK MARKET SONG. (Songspiration.) Smile!

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South of the Border

Speaking of which, It was all smiles in the States this week as American investors saw all three of their major stock market indices, the Dow Jones, the S&P 500 and the Nasdaq, climb upwards throughout the week. Investors were weary heading into Thursday as they awaited some key inflation data, but news of cooling inflation was exactly what the people wanted to hear. Inflation declined to 6.5% year-over-year in December, the sixth straight year-over-year slowdown for the U.S., while on a monthly basis, prices slipped 1% – the first such drop since May 2020.

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Risky ROI

Crypto

Source: Google Finance​

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Crypto Conundrum

After the year that crypto had in 2022, many investors are of the mindset that things can’t possibly be worse in 2023. While that may be the logical thought process, crypto is saying “hold my beer”!

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This is all to say that crypto continues to be in the news for all the wrong reasons. Here are a couple stories from this week:

The crypto market’s continued slump has resulted in another round of layoffs at Coinbase as America’s largest digital asset exchange recently announced that they would be laying off about 950 employees, or 20% of its workforce. Coinbase’s stock slid 86%, while Bitcoin itself ‘only’ slid 64%. Coinbase ticked up nearly 1.5% on Tuesday following the news.

Scams also continue to be a big issue for digital assets as news broke this week of a new scam in Nova Scotia that has so far cost residents hundreds of thousands of dollars. Paul Radford, the chair of the Nova Scotia Securities Commission warned of a so-called “pig butchering” scam where victims are tricked into thinking their investments are making money, and are encouraged to invest more – a strategy the regulator called “fattening up the pig”. Radford said that regulators in North America believe more than $1 billion has been lost to crypto scammers since 2021.

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While the headlines remain gloomy, crypto assets themselves have quietly gained some ground to start 2023. Despite continued low trading volume, most cryptocurrencies are in the green since the start of the new year. The big question as always is, can they keep it up?

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Mining Mania

Canadian mining giant Barrick Gold is expanding its international reach as it recently signed an agreement with Saudi Arabian mining company Ma’aden for two prospective exploration projects in Saudi Arabia. While barrick has yet to disclose the terms of the deal, they are hoping that it will grow their copper production in the country. The Toronto-based miner says the deal expands its partnership with Ma’aden and opens up potential cooperation with the neighboring Jabal Sayid copper mine, which is a 50-50 joint venture between the two companies.

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Moderate and Mellow Market Methods

Sector Spotlight

TMX Group’s First of Many M&As

Canadian financial services company TMX Group (TSX:TMX), the company that operates the Toronto Stock Exchange (TSX), TSX Venture Exchange, and the Montreal Exchange, recently signed a deal to buy a 21% stake in VettaFi Holdings LLC for CAD $234 million. U.S.-based VettaFi is a privately owned data, analytics, indexing and digital distribution company. TMX chief operating officer Jay Rajarathinam says the investment includes an agreement that will accelerate TMX’s global index strategy and increase the depth and value of data-driven insights the company provides to clients.

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It sounds like TMX’s investment in VettaFi is only just the beginningfor the company’s merger and acquisition plans as TMX COO Jay Rajarathinam said “We hope to be doing more of these acquisitions, partnerships as well as organically building out some of the capabilities, because we have some really unique datasets, really knowledgeable folks and connectivity to our clients… so we hope to be doing more of these and getting more global, more information businesses.” Who do you think will be next on TMX’s radar?

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Meme Stock Stalkers

Back at it

Last week it was reported that the popular meme stock Bed Bath and Beyond had begun preparations for a bankruptcy filing that would likely come during its first operating quarter of the year. Bed Bath & Beyond added in a filing that it’s taking steps to improve its cash position, but that recurring losses and negative cash flow in the nine months ended Nov. 26 leave “substantial doubt” that it can stay in business. The company said it’s pursuing options including restructuring debt, selling assets or filing for bankruptcy, but added “these measures may not be successful.” Shares of Bed Bath sank as much as 25% last Friday following the news.

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Now, if you can’t guess what happened next, you must be new here, because in the most typical meme stock fashion, Bed Bath and Beyond surged nearly 60% over the course of Monday and Tuesdays trading sessions. Rumblings of a possible merger and acquisition deal (M&A) ignited the rally that was largely fueled by speculations from the infamous Wallstreetbets crowd on reddit. In conclusion, this isn’t to say the stock is saved as we know meme stock hype is not sustainable, nor is it the formula for a successful company…

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ESG

Gas cars Be Gone

The government of Canada finished off 2022 with an ESG bombshell as Steven Guilbeault, the Minister of Environment and Climate Change, announced that all new passenger cars, SUVs and pick-up trucks sold in Canada will be required to be zero emission vehicles (ZEV) by 2035. The announcement follows the release earlier this year by the Government of Canada of its 2030 Emissions Reduction Plan, outlining its strategy to achieve its interim climate goals to cut GHG emissions by 40% – 45% by 2030.

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On top of the 2035 target, Canada also introduced several interim ZEV sales mandates, requiring ZEVs to make up 20% of new vehicle sales by 2026, and 60% by 2030. According to a government statement, the targets are aimed at helping increase ZEV supply for consumers. According to a government estimate, the new mandate will result in cumulative greenhouse gas emissions reductions of 430 million tonnes between 2026 and 2050.

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Financial Jargon Word of the Week:

The January Effect is a perceived increase in stock prices during the first month of the year. Analysts generally chalk this rally up to an increase in buying, which follows the drop in price that the stock market sometimes sees in December as investors engage in tax-loss harvesting to offset realized capital gains.

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In a sentence, please!

If only the January Effect were real, I’d be cashing in big time at the end of every January!

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Finliti Disclaimer

1. Finliti’s newsletter is published as an information service to our subscribers and may contain references to stocks, bonds, mutual funds, ETFs, cryptoassets, etc., but this should not be construed as direct or indirect advice or recommendation to any reader to buy or sell these assets.

2. Finliti believes the sources it quotes to be reliable, but does not guarantee their accuracy or completeness.

3. Finliti is not paid by any company to recommend its stocks.

4. Employees or publishers of Finliti’s newsletter may own the assets discussed in the publication for their own investment purposes.

5. Past results are not necessarily indicative of future performance.

6. The information provided is for general information services to our readers as a convenience the materials are not a substitute for obtaining professional advice vis-a-vis your personal situation.

7. Given the time critical nature of the market, the information in this article may become outdated and Finliti has no obligation to change the article.

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