🏅 Goldman's commodity play

Finimize gets spooky | Groceries deliver | [TOGETHER WITH]( Hi {NAME}, here's what you need to know for June 21st in 3:07 minutes. 👴 This ain’t your daddy’s 60/40 portfolio. Join EquityMultiple’s CFO for [How To Diversify Beyond Stocks & Bonds]( on June 22nd, and find out how to break with traditional portfolios. [Get your free ticket today]( Today's big stories - A lot of stock market derivative contracts expired on Friday, which might have caused an uptick in volatility - Goldman Sachs has hit upon an underappreciated way to play the commodities rally – [Read Now]( - Grocery giants Tesco and Kroger announced strong quarterly updates Seance Fiction [Seance Fiction] What’s Going On Here? A “witching day” on Friday saw several [options]( and [futures]( contracts expire, and investors were looking for a sign – any sign – of what might come in the great beyond. What Does This Mean? Four times a year, a slew of major [derivative]( contracts on US stocks all expire at once. That leaves investors with a decision to make: buy and keep the related shares, or “roll forward” those contracts by buying ones with a later expiry date. All investors’ subsequent buying and selling on Friday, then, risked making the US stock market extra [volatile](. Only problem was, analysts couldn’t tell whether all that extra activity would be a good thing or a bad thing… Why Should I Care? For markets: There were big scores to settle. Goldman Sachs estimated that there were about $2 trillion worth of options and futures contracts on US stocks expiring on Friday. That’s a lot, sure, but the proportion of contracts whose agreed-upon "strike prices" were within 10% of current prices was as small as it’d been in the last 10 years. That’s important because an investor is more likely to exercise their option – that is, the right to buy or sell at a given strike price and date – if that strike price is close to the current price of the asset. So while there might be some volatility, it would be much more significant if a bigger proportion of those options’ strikes were closer to current prices. For markets: It helps to see these things coming. Most institutional investors will have been well aware of the potential for an uptick in volatility, but it might’ve come as a surprise to retail investors. And while the big-hitters haven’t historically paid much attention to things that unsettle their smaller counterparts, they might want to do just that: retail investors now hold 35% of all US stocks and – thanks to the recent surge in popularity of commission-free trading apps – account for one-fifth of all stock trading. You might also like: [How options can boost your investment returns.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Seance Fiction&utm_campaign=daily-global-21-06-2021&utm_source=email) 2. Analyst Take How To Play The Commodity Rally, Goldman Sachs Style What’s Going On Here? The rally in commodity prices has caught investors’ eyes lately, but the raw materials themselves aren’t the only way to turn a profit. Just ask investment giant Goldman Sachs, which has hit upon [a fresh way to play the trend](. It’s spotted an industry that’s reined in its spending, has less debt than it used to, and is better placed to benefit from [the boom in copper prices]( than any other sector in the world. And since it’s set to deliver its [highest free cash flow in over a decade](, Goldman reckons it’ll give that cash straight to shareholders. So you might want to become one. That’s today’s Insight: which commodity-driven industry is set to break records this year, and [three companies in particular that could be the stars of the show](. [Read or listen to the Insight here]( SPONSORED BY LEDGER How to profit from your crypto You own crypto, and you want it to grow: who doesn’t? Fortunately, you have more [options]( than simply waiting for it to increase in value… See, there are certain techniques you can use to earn passive income and grow your crypto assets. [Ledger]( will show you exactly how to do it. The folks there have created [a guide to break down the different strategies](: Things like lending – where you can earn interest on your crypto – and staking, where you’re rewarded for just sitting on it. That way, you can be sure to understand – and know how to implement – all your crypto options. Learn how to maximize your crypt-folio: [head over to Ledger today](. [Get Started]( Special Delivery [Special Delivery] What’s Going On Here? Two giants of the global grocery industry – Kroger and Tesco – reported earnings late last week, and investors canceled all their plans so they’d be in when they arrived. What Does This Mean? The pandemic’s generally been a boon for grocery retailers: their stores stayed open when almost everything else was closed, and even the extra costs of safety measures were partly offset by strong sales growth. That might be why Tesco – the UK’s biggest retailer ([for now]() – saw its revenue at existing stores come in ahead of expectations last quarter. An uptick in food sales was matched by those in the company’s clothing and [wholesaler]( segments, probably as more people got all dressed up for real-life brunch. It was a similar story across the pond: America’s [number-two]( grocer Kroger likewise reported better-than-expected quarterly revenue and profit. Why Should I Care? The bigger picture: A read on inflation. Grocers’ earnings give you an important insight into how fast the prices of consumer goods are rising. Kroger, for its part, is anticipating inflation in the products it sells of 1-2% this year, which looks likely to be accurate ([tweet this](). The retailer plans to pass on those higher costs to customers, but it also stands to benefit from them: higher prices tend to incentivize consumers to switch to Kroger’s own-brand stuff – which typically delivers a higher profit margin than third-party items – as a way of saving money. For markets: A mixed bag. Kroger also upped its profit predictions for this quarter, which might be why share price rose 4% following its earnings report. But Tesco’s forecast stayed put, and its stock fell 4%. Then again, competition in its key UK grocery market is notoriously fierce, particularly on price. And with inflation increasing, Tesco may struggle to meet its profitability goals even if sales continue to grow. You might also like: [Three ways to spot winning retailers.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Special Delivery&utm_campaign=daily-global-21-06-2021&utm_source=email) 💬 Quote of the day “Let’s have some new clichés.” – Samuel Goldwyn (a Polish-American film producer) [Tweet this]( 🤔 Q&A · [RE: Green Turismo]( Q: “How and why did Jaguar Land Rover ‘write down’ its research spending?” – Ricardo in Quito, Ecuador A: “Companies that invest in research and development are usually hoping to create an asset from it – perhaps a new product or technology that’ll help drive future growth. But Jaguar Land Rover – as part of a broader restructuring – acknowledged that the money it’d spent on research hadn’t created as much value as its books recorded, so it revalued the segment more accurately. The company’s ‘write-down’ is the difference between what that spending was previously worth and what it’s valued at now.” [Finimize] 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=I have a question Finimize!&utm_campaign=daily-global-21-06-2021&utm_source=email) SPONSORED BY CROWDSTREET Not today, inflation No one knows exactly how inflation is going to shake out, but it’s making stock investors edgy. And if it’s making you edgy, it’s a good time to start diversifying into [alternative markets](. And as luck would have it, [CrowdStreet]( has an excellent opportunity. With [CrowdStreet](, you’ll get access to a constant flow of [real estate investments]( – from individual deals, investment funds, and tailored portfolios. “But I don’t know anything about the real estate market!” we hear you cry. Well, it’s a good thing CrowdStreet’s put together a [Definitive Guide To Real Estate Investing](, laying out its predictions for the year, the best places to invest, and much more besides. And with nearly 500 deals behind them, they’re the biggest online real estate platform out there. That is definitive. [Get The Guide]( When you support our sponsors, you support us. Thanks for that. 🎯 On Our Radar - You’re welcome. The [best cheap beers](, by blind taste test. - As if ocean plastic wasn’t bad enough. Invasive species are [hitching a ride]( on trash. - Less energy used or more mining? [Cooling paint]( has its pros and cons. - “As you advance, you assist the collective.” [Cult language]( is everywhere. - Like the look of this space? 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