Plus: what Snow White has to do with Canada’s economic strength May 30, 2022 Made in Canada IN THIS ISSUE 🌪️ A superstorm wreaks havoc 🦄 A super unicorn gets a little less super 🦍 A superstar (fine, Seth Green) misses his ape WHAT HAPPENED LAST WEEK Rick Madonik/Toronto Star | Two people with strollers walk past a tree that was blown over during the derecho in Ontario and Quebec on May 21, 2022. IMPORTANT Snap got slapped. The social media company’s stock fell more than 40% — in a day — after CEO Evan Spiegel called a redo on rosy earnings estimates released in April. The drop shows just how tough the market is for tech companies that rely on ad revenue: Apple’s new privacy features were a kick to the stomach, businesses are cutting ad spends in the face of a possible recession, and investors’ trigger fingers seem itchier than ever, given how primed they are to sell on any hint of bad news. Canadians withdrew nearly $5 billion from mutual funds in April, according to new data from the Investment Funds Institute of Canada. That’s a huge shift from March, when people actually bought $1B more mutual funds than they cashed in. INTERESTING Canada’s first “derecho” in 23 years tore through southern Ontario and Quebec. What’s a derecho? Pronounced deh-RAY-cho, it’s a massive thunderstorm that can have hurricane-force winds and spin off tornadoes. The storm killed ten, left nearly a million homes and businesses without power, and caused an estimated $600 million in damages. And thanks to climate change, it’s probably not the last we’ll see. In a PR derecho, an HSBC exec gave a speech calling climate fears overblown. Stuart Kirk, the bank’s global head of responsible investing, referred to eco-warriors as “nut jobs,” and wondered, “Who cares if Miami is six metres underwater in 100 years?” Unlike climate change, he was quickly suspended. The week in markets (in emoji) 🐻 🥳 📈 🐄 ⬆️ 🪵 ⬇️ 👾 😴 🙏🏽 Here’s the picture of the last seven days: Stock markets bounced last week in what investors call a “bear market rally.” The S&P 500 was up 6% and the TSX up about 3%. Companies with positive cash flow (tracked by the fun-sounding COWZ ETF, which was up 7%) continued to do well, particularly the ones involved in oil (XOP up 15%). But so did some tech companies that have been hit so hard in recent weeks, such as ARKK that was up nearly 10%. There was no such reprieve for crypto investors — Bitcoin was down another 5% and Ethereum down another 15%. THE FOMO INDEX IMPORTANT 👎 Those online learning tools that boomed in the pandemic? They were selling kids’ data, a new investigation shows. Source 👗 Balenciaga stages the first fashion show ever at the NYSE. First time for latex bodysuits on the trading floor, too. Source 🌎 The universe is expanding faster than predicted. Is a gravitational “mirror world” causing it? Stay weird, science. Source 💡 Amazon opens a physical building where you can buy clothing. The e-commerce innovator calls it “a store.” Source CRASH & BURN TO THE MOON 🙈 Seth Green’s apes: stolen. Ape-based TV show: on hold. Copyright law: so bizarre. Source 😡 Coinbase pioneers way to make meetings even worse: rating co-workers in real time. Source 🏈 Pepsi drops Super Bowl halftime show, probably because people already know about Pepsi. Source 📉 Stranger Things is back on Netflix this week, but $NFLX share price is still lost in the Upside Down. Source WHO CARES WHAT’S UP THIS WEEK MONDAY May 30 Heigh-ho, heigh-ho, it’s earnings week for the mining and minerals sector, you know. Why does that matter? Companies like Arizona Metals, Foran Mining, and Rock Tech Lithium represent almost 13% of Canada’s GDP — and approximately 100% of employees most likely to sing at work. The better they do, the better the TSX does. WEDNESDAY June 1 The next rate hike is coming. Probably! Although nearly half of Canadians say they don’t want it (compared to the 53% in another poll who say they need it), the Bank of Canada — which, likely for the best, doesn’t really listen to public polls — is expected to raise interest rates another half point in its fight against inflation. Bad news for anyone who didn’t lock in that mortgage, but possible good news for people who are tired of spending $10 on cottage cheese. THE BIG IMPORTANT STORY BUY VS RENT How to Decide if You Should Buy, Rent, or Run Away Although it went down a bit this month, the average sale price for a home in Canada is at a still-astronomical $746,000 — up 7.4% from a year ago. That’s good information to have, but if you’re a prospective buyer, what do you do with it? Does it mean the market is too hot to buy into? Or too hot not to buy into? Does it even help if home prices fall a little when mortgage rates are going up a lot? And how come they never talk about any of this on House Hunters? If you’re not sure whether it’s better to rent or buy, there’s no simple answer to any of these questions. But there are at least a few things to keep in mind to help you decide your best move. Don’t confuse the amount you can borrow with the amount you can afford To figure out how much house payment you can afford, take your household income after taxes, then subtract fixed expenses (groceries, the water bill), discretionary expenses (fancy dinners, your Vitaminwater bill), and whatever you need to save toward (an upcoming wedding, retirement). What’s left needs to cover a mortgage payment, property taxes, insurance, and maintenance fees. Not enough? It’s either not the right time or not the right home. Don’t try to time the market Buy if and when it feels right for you, not because you’re afraid prices will go up or down. Assuming you can stay in a home longer than five years, you’ll likely be able to ride out any market downturns. Don’t think of renting as throwing money away Homeownership may get you equity and let you paint the living room without asking permission, but renting means not worrying about repairs and being able to move easily when you get a new job or need a new neighbour. Plus, if you invest the money you’d have used as a downpayment, with the right returns you could even end up better off than if you’d bought the house. — Alex Palmer TOTALLY NONESSENTIAL GOOD READS 👪 What TikTok’s obsession with nepotism babies says about class When your faves have family connections | The Face 💳 How Credit Scores Can Run—and Ruin—Our Lives How did the rating system become so powerful? | The Walrus 💔 Anger, anguish among Parkland and Newtown families after Texas shooting Heartbreaking reactions in response to the tragedy | Washington Post THE WISDOM OF TWITTER Math in 2022: THOUGHTS ON TODAY’S ISSUE? 🤑 Love it 🙂 Good 🙁 So so This week’s newsletter contributors: Brennan Doherty (writer), Jared Lindzon (writer), Devin Gordon (writer), Alex Palmer (writer), Sarah Rieger (news writer), Rusty Foster (editor), Meaghan Wray (copy editor), Ambrose Marton (fact checker), Sara Black McCulloch (fact checker), Peter Martin (senior editor), and Kat Angus (managing editor). Full disclosure: contributors to this newsletter own stock in GameStop. Wealthsimple Media Inc. 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 Replies to this email address are not monitored. Have questions? Visit our Help Centre or submit a request to our Client Support team. VIEW IN BROWSER PRIVACY POLICY UNSUBSCRIBE TLDR is offered by Wealthsimple Media Inc. and is for informational purposes only. Any views expressed are those of the individual author and/or of Wealthsimple Media Inc., not of Wealthsimple Financial Corp or any of its other subsidiaries or affiliates. The content in TLDR is not investment advice, a recommendation to buy or sell assets or securities, nor any other kind of professional advice. TLDR is not a research report and should not serve as the basis for making investment decisions. Wealthsimple Media Inc. does not endorse any third-party views referenced in this content. When you invest, your money is at risk and it is possible that you may lose some or all of your investment. Past performance is not a guarantee of future results. Historical returns, hypothetical returns, expected returns and images included in this content are for illustrative purposes only. Always research before investing. © 2022 Wealthsimple Media Inc.