And got paid more to boot. April 29, 2024 Sign Up | View online Hi! TLDR is hitting your inbox really late today, because the email system we use experienced a big outage. Sorry about that! —The Editors IN THIS ISSUE 8 min read 💰 Saving secrets 🏭 Fancy car factories 🏆 Webby winners! (That’s us!) A new report highlights that jumping ship can get you ahead. Read how below. | AMC THE WEEK IN MARKETS Why One Market Is Having No Fun Stocks went for a ride in the bouncy castle last week — down on inflation news and the rising likelihood of higher-for-longer interest rates, then up on strong tech earnings. The S&P 500 finished up 2.3%, while the TSX gained about 1%. But let’s talk about another market that has been locked out of the ride lately: bonds. It hasn’t just been a lousy year for bonds; it’s been a lousy five years — an actual negative return over that period. That’s unusual. Why is this the case? Inflation is bond kryptonite, because it devalues their payouts and leads to higher bank rates, aka stiffer competition. But markets are dynamic, so the question is: when will fortunes change for bonds? If inflation stays stubbornly high, expect more of the same. But if inflation and rates fall faster than expected, it could be bonds’ turn at the carnival. THE WEEK IN ONE CHART Tesla’s beleaguered stock recovered about 20% last week (and it’s up more Monday) after CEO Elon Musk promised investors that the company would accelerate the launch of lower-cost models. That substantial rise doesn’t mean Tesla has the market’s full confidence, though. Its Q1 earnings were dismal amid softening demand for EVs and tough competition from China (and maybe soon Canada; see below). Even with the recent bump, Tesla shares are still down 53% from their 2021 peak. WHAT HAPPENED LAST WEEK IMPORTANT Honda is building not one, not two, but four EV plants in Canada. The Japanese automaker announced that it’ll spend $15 billion to create an entire EV supply chain, from battery-cathode processing to vehicle assembly, right here in Canada. The feds and Ontario vowed to pitch in about $5 billion in subsidies, bringing the total handouts to EV makers over the past few years to around $46 billion. The feds boasted that the plants will create more than 1,000 new jobs, while the opponents complained that the openings could go to temporary foreign workers and not help Canadian citizens all that much. Canadians stop buying fun stuff. Fresh data showed that Canadian retail sales were flat in the first quarter of the year, with shoppers cutting back on stuff like clothing, books, furniture, and sporting goods. And it’s no wonder, since a WWE-style tag team of rising unemployment (the rate currently stands at 6.1%!) and high mortgage rates has hit our wallets hard. Retail spending is still well above pre-pandemic levels, but stores like Canadian Tire and Walmart Canada are still feeling some pain. One silver-ish lining? Slowing retail sales could nudge the Bank of Canada to cut interest rates as soon as June. INTERESTING The secret to getting a big pay bump? Quit. At least that’s what data collected by payroll firm ADP suggests. It found that the annual pay increase for U.S. workers who switch jobs tends to be twice the size of those who don’t jump ship — 10% compared with 5%. In Canada, there’s long been a similar trend, but it got extreme during the pandemic, with some job switchers reportedly upping their pay by as much as 20%. Such a dramatic jump might be a smidge harder to come by now that the labour market is cooling, so maybe temper your expectations a bit. Investors love AI, unless it’s built by Meta. Microsoft, Alphabet, and Meta all reported earnings, and their investor calls focused on (what else?) AI. Microsoft shares rose after the giant reported a 20% increase in quarterly profits, highlighting the success of its Copilot chatbot. Alphabet stock gained, too, after the company stated it saw progress with its generative-AI tool and paid out its first dividend. Meta, though, didn’t have much success selling investors on its recent push into AI — in part because it sure seems like all they really did is change the label on their content algorithm and rebrand it “AI”. That Meta plans to spend US$40 billion this year developing its fledgling AI capabilities also brought back some unfun memories of Zuck’s failed metaverse pivot. We won a Webby! TLDR was named Best Business, News and Tech Newsletter on the entire internet — a first for Canadian media! Not to brag (okay, yes to brag): we beat out CNN, The Hustle, Scott Galloway, and some other great newsletters. How are we celebrating? We’re planning a huge refresh of TLDR! So please use the feedback module below to let us know what you love, what you hate, and what you politely tolerate. And thanks for reading and letting us exist! —Sarah Rieger FROM OUR SPONSOR THE FOMO INDEX by Stacey Woods IMPORTANT 🛑 U.S. passes bill to ban TikTok unless it’s sold, so make sure you have that NyQuil Chicken recipe written down. Source 🏠 Toronto house prices are expected to overtake Vancouver’s soon, in case your parents are thinking of buying you one there. Source ✊ Quebec Amazon warehouse could be the first one to unionize. First on the agenda: order some back braces on Amazon. Source 🚗 Uber finally debuts in Newfoundland! Would’ve happened sooner but took forever to geotag all those fishing shacks. Source CRASH & BURN TO THE MOON 🧢 Stay in style and out of jail: Calgary lawyer launches streetwear that reminds you of your right to counsel. Source 🦗 South Carolina’s cicadas are so loud people are calling the police. Not much the cops can do without smaller cuffs. Source 🐶 Judge grants broken-up couple joint custody of their golden retriever. Unclear who pays lint-roller support. Source 🔥 Tinder adds a “share my date” feature so friends will know exactly where to show up with a fake emergency. Source WHO CARES THE BIG IMPORTANT STORY FINANCE 101 How to Trick Yourself Into Saving — No Hypnotist Required Saving is hard, especially right now amid Canada’s cost-of-living crisis. But, unless you’re a trust-fund nepo baby or were an early Apple investor, you’re going to have to do it. And — sorry if this sounds puritanical/zero fun! — the earlier you start saving, the faster you can pay off your debts and then work toward your investing or retirement goals. We asked the Canadian economist Hersh Shefrin, who teaches at Santa Clara University’s Leavey School of Business, how to trick yourself into socking away cash. [1] Make other people make you save As anyone who has crushed a pint of ice cream in one sitting can attest, self-control can be hard to come by. When it comes to finances, “the desire for immediate gratification often overwhelms the need for long-term planning,” Dr. Shefrin explains. The most effective way of dealing with that, he says, is to use what are calls “external roles.” Here’s what that means: putting money in your retirement account will never be as thrilling as buying, say, a nice bottle of rye. Which is why there’s a decent chance that, if given the choice, you might not save. To stay on track, make it so that you have to decide not to save money, instead of deciding to save. You might already be doing this through your job: if your employer takes money out of your paycheque and contributes it to an RRSP, your employer is an external role. You never see the money, so you’re not tempted to spend it on other stuff. [2] The magic of automatic deposits Don’t just count on your employer to save: be your own external role by setting up weekly or monthly automatic withdrawals with your bank or investment service to ensure you’re working toward your goals. Watching money grow feels good, and that makes you want to save more. The trick is to pick a number that’s actually doable. If you keep having to take money out, that can ruin all the positive reinforcement you’ve been giving yourself. Remember: you’re not creating a slush fund to use whenever. Set a target amount and a goal (like buying a house), and don’t use that money for anything else. [3] Only use cash Do you know why casinos use poker chips instead of cash? So you forget you’re spending money. When it comes to savings, remind yourself and make it tough by using cash. Shefrin recommends carrying large bills and paying with whatever the largest bill in your wallet is. “That forces you to think, ‘Well, do I really want to break a hundred-dollar bill in order to have a particular expenditure?’ That becomes a way of saving: by cutting down your consumption.” [4] Make a habit of setting aside some cash Now introduce a little pleasure to saving. “When you pay for stuff in cash,” says Shefrin, “and the change is $5 or less, put that in whatever your version of a piggy bank is and let it accumulate over a month. And then go deposit it. That feels pretty good.” This is obviously not going to be enough to set you up in a Tuscan villa for an early retirement, but it adds up quickly. [5] Turn savings into a game “Gaming is really the key because it gets your brain to turn on the reward centres,” Shefrin says. “If the reward centres are driving your behaviour rather than fear, it’s likely that you will act.” One easy way to do this is to pick an attainable number to save each quarter. (We cover budgeting and how much you might want to save here; scroll to the bottom.) When you hit your number, reward yourself with a nice night out or an expensive pair of jeans. “Just make certain that you structure the game so that it’s winnable, and then you can get the treat,” says Shefrin. “You’ll also need to be tough on yourself — if you don’t save, then you forgo the treat.” But usually, he says, “People respond really well to game environments.” OTHER VERY GOOD READS 👹 Monsters Inc How a Montreal VFX studio conquered the film business. | Globe and Mail 🎸 The Money Bands Make on Tour As T-Swift tops $1B in revenue, smaller musicians face losses and fees. | The Guardian 🗄️ Five Tax Enigmas That Confuse Basically Everyone Steer clear of these sticking points to hit Tuesday’s tax-filing deadline. | Wealthsimple Magazine THE WISDOM OF X We’re totally convinced Canadians can handle four entire companies… THOUGHTS ON TODAY’S ISSUE? Love it Good So so This week’s newsletter contributors: Ben Mathis-Lilley (writer), Devin Gordon (writer), Stacey Woods (writer), Sarah Rieger (news writer), Ambrose Martos (fact checker), Ciara Rickard (copy editor), Clare Douglas (copy editor), Sara Black McCulloch (fact checker), Mohini Tailor (senior lifecycle specialist), Matthew Karasz (markets editor) Jared Sullivan (senior editor), Peter Martin (senior editor), Kat Angus (managing editor), and Devin Friedman (editor-in-chief). Disclosures: Contributors to this newsletter own shares in Microsoft and Google. 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 Managed accounts are offered by Wealthsimple Inc., a registered portfolio manager in each province and territory of Canada. 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