The metaverse can't come soon enough | Rio Tinto misses the good old days |

Hi Finimizer, here's what you need to know for July 28th in 3:15 minutes.

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Today's big stories

  1. Meta's quarterly results proved advertising isn't what it used to be
  2. Our analyst has picked out 10 portfolio must-haves for a potentially tumultuous next five years – Read Now
  3. Mining giant Rio Tinto is in a slump after last year's successes

For Meta, For Worse

For Meta, For Worse

What’s Going On Here?

Meta posted a steeper-than-expected drop in both quarterly revenue and profit late on Wednesday.

What Does This Mean?

After bleak results from fellow social media giants Snap and Twitter late last week, investors were worried that the same fate awaited Meta. They were right to be nervous: Meta’s monthly active users might’ve risen marginally across all its platforms from the same time in 2021, but more eyeballs isn’t translating into more advertising revenue. That’ll happen as companies slash budgets left, right, and center, and as Apple’s privacy updates continue to impair Meta’s ability to target the right products to the right users. That might be why the company’s profit and revenue came as such a disappointment, and why it gave a much weaker-than-expected outlook for this quarter too.

Why Should I Care?

Zooming in: Meta sees you.
At least Meta is working hard to boost growth. First, it said this week that it would be introducing music revenue-sharing on Facebook, which will allow creators to make money from videos that use licensed music. That should lure more users to the platform and help it compete with Chinese nemesis TikTok. And second, the company is reportedly thinking about buying eye-tracking technology firm AdHawk Microsystems. That would allow it to improve its VR headset offering, which will be vital if it’s going to make good on its push into the metaverse.

The bigger picture: The Fed nears the tipping point.
Meta warned investors about “macroeconomic uncertainty” ahead, and it has a point: the Federal Reserve (the Fed) hiked interest rates by 0.75% for the second-straight time on Wednesday. That takes them close to the “long-run neutral rate” – a level estimated to neither stimulate nor restrict economic growth. But since the Fed has already indicated that it won’t stop hiking until inflation is inarguably on the way back down, it might not be long before that neutral rate is a distant memory.

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Analyst Take

10 Portfolio Must-Haves For The Next 5 Years

10 Portfolio Must-Haves For The Next 5 Years

By Theodora Lee Joseph, Analyst

You’re in for a challenging few years, that much is clear.

After all, the market is in the throes of peak growth, rising interest rates, high inflation, and meager market returns.

And while no one’s entirely sure how long this environment might last, now seems as good a time as any to prep your portfolio as if it’s here for the long haul.

Because there are certain stocks, bonds, commodities, and alternatives that stand to outperform the rest in a half-decade that already looks very different to the last one.

So that’s today’s Insight: the 10 must-haves for the next 5 years.

Read or listen to the Insight here

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Mine, All Mine

Mine, All Mine

What’s Going On Here?

Rio Tinto – the world’s second-biggest miner – reported on Wednesday that its profit dropped off a cliff in the first half of the year.

What Does This Mean?

Rio Tinto was in an enviable position last year, with metal prices on the up and up as manufacturers returned to full strength. But now that a global recession is rearing its ugly head, they’ve come tumbling back down: the price of iron ore – the steelmaking ingredient that Rio Tinto relies on to make most of its money – has halved since this time last year. Rio’s mining costs have risen too, with the prices of everything from diesel to explosives going through the roof. All this came to a head in the first half of the year, when Rio’s profit dropped 29% from the record haul of the same time in 2021.

Why Should I Care?

For markets: Will Rio go shopping?
This was such a blow, in fact, that Rio said it would pay out “just” 50% of its profits to its shareholders in the form of dividends – down from the 65% average of the past three years. It’s still the miner’s second-biggest half-year payout on record, mind you, and it’ll leave Rio with plenty of spare cash on its balance sheet. Some analysts even think it’ll start buying up other, less financially secure companies in the sector, which isn’t outlandish: the company showed it’s keen to double down on the green energy transition by buying a lithium mine last year, as well as offering to buy out copper producer Turquoise Hill Resources entirely.

The bigger picture: It’s only getting tougher.
Then again, Rio might want to hold onto that nest egg. For one thing, the economic slowdown is only expected to get worse, with the International Monetary Fund this week slashing its 2022 global growth forecast for a third time to 3.2% (tweet this). And for another, Goldman Sachs thinks the supply of Rio’s all-important iron ore will overtake demand in the second half of this year.

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💬 Quote of the day

“Things start out as hopes and end up as habits.”

– Lillian Hellman (an American playwright, prose writer, and screenwriter)
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🌍 Finimize Live

🎉 Coming Up In The Week…

All events in UK time.

🙌 The Power Of Investing In Web3 Communities: 1pm, July 28th
♻️ Building A Crypto ESG Framework: 6pm, August 2nd
🚀 The Next Six Months For Stocks And Crypto: 5pm, August 3rd

🥳 And After That…

🎉 What’s Next For NFTs: Innovations, Utility, And Trends: 5pm, August 4th
📈 A Case For DAO Treasury Diversification: 6pm, August 9th
💻 How To Spot The Best Tech Stocks: 6pm, August 16th
🏈 Crypto And The Sports Community: 5pm, August 23rd
👑 How To Invest In Gold On The Blockchain: 5pm, August 25th

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