💉 Big Pharma, big problems

Big Pharma's going to court | There's hope for the UK yet | [TOGETHER WITH]( Hi {NAME}, here's what you need to know for August 15th in 3:15 minutes. 💻 Not all tech stocks are created equal: while some are suffering at the hands of inflation, others are thriving from it. So join The Motley Fool’s Asit Sharma for [How To Spot The Best Tech Stocks]( on Tuesday, and discover the three tech stocks that are still worth buying. [Get your free ticket]( Today's big stories - Investors ditched shares of major pharmaceutical companies last week ahead of a major lawsuit - Our analyst has laid out how to fix the one big mistake most investors make at times like this – [Read Now]( - The UK economy shrank slightly less than expected in the second quarter Big Pharma Is Headed For A Big Lawsuit [Big Pharma Is Headed For A Big Lawsuit] What’s Going On Here? Shares of major pharmaceutical firms GlaxoSmithKline (GSK), Haleon, and Sanofi tumbled last week as a potentially cancer-causing drug goes to court. What Does This Mean? Heartburn drug Zantac was pulled from the market in 2020 when it was found to contain a cancer-causing substance, and drugmakers GSK and Sanofi have been braced for a lawsuit ever since. But if investors were shocked that Big Pharma could put profit above health, they certainly didn’t show it – until now. Legal proceedings are kicking off next week, and investors suddenly seem a lot more nervous about holding stocks that could be affected. There could be a few worth worrying about too, since Sanofi is just one of many drugmakers with rights to the drug, and there are a handful of distributors involved as well. But GSK could have the most to lose: the powerhouse first brought Zantac to the market, and its spin-off Haleon might be tarred with the same brush. Investors just ditched them all: shares of GSK, Haleon, and Sanofi fell about 10% last week. Why Should I Care? For markets: Bayer’s remorse. Investors value a company based on the cash it’s expected to make in the future, so anything – including potentially billion-dollar lawsuits – that threatens those cash flows will reduce what an investor’s willing to pay for the shares today. After all, they’ve seen profit-wrecking pharma payouts before: Bayer bought agricultural biotechnology firm Monsanto for $63 billion in 2018, and ended up paying [$12 billion]( only a couple years later to settle lawsuits around Monsanto’s weed-killer Roundup. For you personally: Not-so-defensive stock. This isn’t great timing: investors tend to hold healthcare stocks during recessionary times like these because they make products people need no matter what. Still, some investors will fare better than others: those who own a basket of healthcare stocks via an [exchange-traded fund]( – rather than individual ones – are better protected against selloffs that affect a few specific companies. You might also like: [How to assess pharma companies before investing in them.]( 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=Big Pharma Is Headed For A Big Lawsuit&utm_campaign=daily-global-15-08-2022&utm_source=email) Analyst Take How To Build A Robust Portfolio [How To Build A Robust Portfolio]( [Photo of Stéphane Renevier] Stéphane Renevier, Analyst There’s [one big mistake]( a lot of investors make. They spend plenty of time thinking about what to include in their portfolio, and very little thinking about [how much money to allocate]( to each position. It’s a costly and avoidable error: you could create a [much stronger portfolio]( just by having the right mix of assets. And as luck would have it, there are [three simple steps]( that can help you achieve just that. That’s today’s Insight: [how to build a more robust portfolio](. [Read or listen to the Insight here]( SPONSORED BY BITCOIN.COM Crypto can be loyal You might not have heard of loyalty tokens in crypto, and that’s a real shame. See, they have a lot of potential: you can [cash them out]( for real fiat, meaning they’re a closer equivalent to cold, hard cash. Thing is, few projects have zoned in on [loyalty tokens]( so far. Now you can unlock their full potential by [collecting loyalty rewards]( with [Verse]( in the same way that you rack up frequent flier points, and you can convert them into cash at any point. Verse is set to help power the mighty [Bitcoin.com ecosystem]( that’s already used by millions around the globe, and you can find out more about the utility token in the [Verse whitepaper](. Limited Verse tokens will go on sale soon, so best [get pre-approved today](. [Discover Verse]( The Verse token sale is not available in the U.S. and other [restricted jurisdictions](. The UK Is Flirting With Recession [The UK Is Flirting With Recession] What’s Going On Here? Data out on Friday showed the UK economy [shrank]( less than expected in the second quarter. What Does This Mean? The UK economy shrank 0.1% last quarter compared to the one before, but it could’ve been worse: economists were expecting twice that, at a time when every increment matters. That marks the first contraction in the economy since the height of the pandemic, and it was down to a domino effect of factors. High inflation has been stoking the cost-of-living crisis, which has left Brits with less disposable income to spend out and about. That, in turn, led to a drop in household consumption (partly reflected in weak retail sales), and a drop in manufacturing. It’s also worth bearing in mind that there was one day less of business, with Brits given a day off to celebrate the Queen’s Platinum Jubilee. So when you put it all together, less shrinkage than expected was actually something of a win. Why Should I Care? For markets: You can relax. You need two quarters of contraction in a row for an economy to officially be in a [recession](, and Bloomberg Economics doesn’t think that’ll happen just yet. After all, Brits don’t have a royal day off this time around, which means the economy – measured relative to the quarter before – has an extra day to boost its numbers. And even if there is a downturn, it’s not the end of the world: the US is technically in a recession, but investors seem to have shrugged it off. The bigger picture: You can stop relaxing now. The UK might avoid a recession this year, but the Bank of England (BoE) thinks it’s bound to arrive in 2023 ([tweet this](). The central bank puts that down to – what else? – inflation, which it thinks will peak at around 13% in October on the back of rising energy prices. Then again, the UK energy regulator’s latest data suggests the BoE is still underestimating energy costs, which arguably means it’s still underestimating inflation too… You might also like: [What to do with your portfolio if stagflation hits.]( 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=The UK Is Flirting With Recession&utm_campaign=daily-global-15-08-2022&utm_source=email) 💬 Quote of the day “Don’t take life too seriously. You will never get out of it alive.” – Elbert Hubbard (an American writer, artist, and philosopher) [Tweet this]( 📝 [Insert your company’s name here] Your company’s name would look pretty good [in this space](, huh? We’re sure our one million engaged investors would think so too. If you want to spread the word about your business, chat to us about our [daily newsletter slots](. They’re the perfect opportunity for you to [speak directly with the Finimize community](. Sound good? 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