😭Salesforce falls

and Apple bounces back in China

Good morning investors! Earnings season is winding down, and a strange confluence of events is occurring — the economy is softening, but corporate profits are accelerating, which is making analysts more confident.

Today we cover:

  • Wall Street changing stocks

  • Salesforce comes down with force.

  • Apple bounces back in China.

📊 Economy and News 

Buying stocks the new way

Wall Street has changed how we buy stocks.

The old standard settlement cycle for broker-dealer transactions was "T+2," meaning it takes two business days from the purchase of a stock for the transaction to settle. This process involves the official transfer of the stock to the buyer's account and the delivery of cash to the seller's account, a practice established in 2017.

From this week (May 28), this settlement cycle has been shortened to one business day, or "T+1."

"For everyday investors who sell their stock on a Monday, shortening the settlement cycle will allow them to get their money on Tuesday," said Gary Gensler, chair of the Securities and Exchange Commission, in a press release. "It will make our market plumbing more resilient, timely, and orderly."

These new rules apply to stocks, bonds, municipal securities, exchange-traded funds, some mutual funds, and limited partnerships that trade on an exchange. Broker-dealers and registered investment advisors will also need to adhere to new recordkeeping regulations.

Some investors believe that a shorter settlement cycle will enhance market liquidity and reduce margin volatility—the collateral traders must provide—by decreasing the risk of default before the transaction is completed. Clearinghouses, which facilitate transactions between buyers and sellers, require margins as proof that traders can fulfill their transactions.

Global hits:

Ouch: UiPath shares tank 30% after company announces CEO shakeup.

Just in: Saudi Aramco to reportedly sell $10 billion to $20 billion worth of shares in a new offering. Also, ConocoPhillips is buying Marathon Oil in $22.5 billion deal.

📈 Stocks

S&P 500 5,266.95 (-0.74%)
DJIA 38,441.54 (-1.06%)
NASDAQ 16,920.58 (-0.58%)
BRENT CRUDE 83.22 (-0.22%)
* Prices as of May 30th, 12:20 AM UTC

Salesforce crashes after a revenue miss

Salesforce shares plummeted as much as -17% in extended trading on Wednesday after the cloud software vendor reported weaker-than-expected revenue and issued guidance that trailed Wall Street’s expectations.

Here’s how the company did, compared to consensus:

  • Earnings per share: $2.44 adjusted vs. $2.38 expected

  • Revenue: $9.13 billion vs. $9.17 billion expected

A drop of this magnitude on Thursday would mark Salesforce’s worst day on the market since the 2008 financial crisis.

Good to know: Walgreens is cutting prices on 1,500 items, joining Target, Walmart and Amazon.

Sing this Samsung: Samsung union calls first-ever strike after pay negotiations stall. This comes at a time when the company is facing probe after two chip workers exposed to radiation.

Apple rebounds: A rebound in Apple’s iPhone sales in China is gaining momentum, after the company aggressively cut prices in its largest overseas market to lure back consumers actively hunting bargains in a weak economy.

Shipments of foreign-branded cell phones in China, the vast majority of which are iPhones, surged 52% in April to 3.489 million units.

The increase is a major acceleration from the 12% growth logged in March by foreign-branded smartphones, according to previous data from CAICT.

In another interesting Apple news, some iPhone 7 and iPhone 7 Plus owners may be eligible for a payout as part of a $35 million settlement.

💵 Personal Finance

How investors can make money through crowdfunding – Part I

The global crowdfunding market stood at $1.9 billion in 2021, and is expected to hit the $6.8 billion mark by 2031. Said to be growing at a CAGR of 14.3% for the 10 year period, it’s a highly rewarding industry worth investing in.

It is defined as " the practice of funding a project or venture by raising money from a large number of people, typically via the internet."

When we talk about crowdfunding, we usually think of it as a tool to gather money. However, it can also be used as an investment vehicle. Here’s how:

Equity Crowdfunding

As the name suggests, equity crowdfunding involves purchasing equity or ownership in a company. 

The first step is to find people looking for investment in the form of crowdfunding with a share of ownership in return. You make money when you bet on the right company, i.e.: when it grows in the future or gets acquired by a larger company.

In most cases, you will then have the option to sell your shares or receive dividends. 

Debt Crowdfunding

Debt crowdfunding involves providing loans to individuals or businesses. These loans typically come with a fixed interest rate, and investors make money through the interest paid on the loans.

A lot of people look for this way of raising funds as it is less demanding than banks and other traditional funding methods. However, from an investment perspective, it can be very risky because you might not get your money back. Still, people use this option because the interest rate is usually higher than what traditional banks offer.

Note: Some debt crowdfunding platforms also offer the option to sell loans to other investors on a secondary market.

There are more ways to make money using crowdfunding, look out for tomorrow’s issue to know.

💰 Be a Better Investor

"The four most dangerous words in investing are: 'This time it's different."

Sir John Templeton

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