Hatch

Hatch Weekly: Eh? How very un-Canadian of you, Canada Goose.

Do you take Apple Card? Yeah, you do.

Apple (AAPL) has just announced it’s going to launch a credit card in August. Just as well as iPhone sales continue to fall (but shares rose…see below).

How do ya like them earnings, Apple?

Last Tuesday, during the Apple earnings call, CEO Tim Cook shared that the company’s third-quarter revenues beat predictions, resulting in a 3% jump in shares during after-hours trading. Apple painted a rosy picture and claimed booming growth in China for its wearables; Apple AirPods and Apple Watches helped boost revenues. He also let the world know about the Apple Card. Apple is playing the diversification game well, pumping up its sales with services like Apple Pay and Apple Music, and now, Apple Card. Why diversify? Apple revenues fell in the previous two quarters because everyone already has an iPhone. And they don’t want an upgrade right now. Third-quarter iPhone sales made up less than half of Apple’s revenue for the first time since 2012. Apple’s ecosystem play (aka world domination) will include gaming subscription platform Apple Arcade, Apple’s Netflix-style streaming service Apple TV+, a new premium news platform Apple News+, and now, credit card services!

Of course it’s flash, it’s Apple

The Apple Card comes with all the bells and whistles. Did you expect anything less? The card includes a user interface that will break down purchases into categories like food and shopping, and track payment due dates to help you control your budget. Instead of a points system, Apple is offering cashback incentives. Easier than apple pie to sign up, you’ll be able to do it through Apple Pay that’s already in your Wallet App. There’s an actual physical card too, sleek AF and made of titanium, and it comes with your name laser etched on it. What’s the catch? None, Apple says there are no hidden or annoying fees. If you love Apple, your phone is about to become a lot stickier.

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Your goose is cooked, Canada Goose!

There are two Canadians on Team Hatch, and we were honking mad when we heard Canada Goose (GOOS) is no longer sourcing its skins and furs ethically. Who knew the markets would react, but they did with shares falling two days straight and dropping 4.7% in total. Ducking hell.

Outed by the New York Post 

The New York Post reported that Canada Goose had sneakily removed some references to ethical treatment of animals from its promotional materials and website. How un-Canadian. They also word-smithed a statement from saying that they would ensure ethical sourcing of fluffy animals to saying they are “committed” instead. Interestingly enough, Canada Goose has been under investigation by the US Federal Trade Commission for misleading advertising. They remain under the watchful eye of PETA (and Pamela Anderson, a Canadian no less!) who purchased shares of Canada Goose in 2017 to influence organisational change as an activist investor.


Want a jacket? $900, eh!

Canada Goose is known for its $900 luxury down jackets and its long-standing ethical sourcing standards for its clothing. Is this dip a one-off? Going public in 2017 (raising $255 million at the IPO), this isn't the first time the stock has wobbled. In May this year, they reported fourth-quarter sales that fell below expectations, and the share price finished the month down 37%. Pundits continue to worry about over-saturation of the market and slow growth in China. It's not all doom and gloom though: over the last three months, Canada Goose Holdings has an ROE (return on equity) of around 46%. Wha? This means that for every $1 worth of shareholders' equity, the Goose generated $0.46 in profit. At a share price hovering around $44, investors get to decide: is it a good buy or is it goodbye?

Trade Wars: A new hope

Thanks to reemerging geopolitical tensions, stocks suffered their worst week of the year last week. Boo.

Trump card played (again)

Why the market jitters? Welllllll, President Trump threatened to impose tariffs on $300 billion in goods that the US buys from China. It looks like the conflict between the two countries will be Star Wars saga length. Bureaucrats in Beijing were stunned by Trump’s announcement and urged the US to back down. Trump had previously tweeted that constructive talks had taken place in China, but we knew with subsequent tweets that it wasn’t over. Don’t pretend to be surprised by President Trump’s latest tweets. Financial experts warn of “economic drag” in the event of escalating trade tensions and expect continued market volatility, so buckle up and pass the popcorn.

China slump 

Earlier this year, Trump imposed tariffs on $250 billion of Chinese goods including chemicals and machinery. In return, China placed import levies on $110 billion of US goods. Stakes are high. China has the world’s second-biggest economy, but it has dropped to its slowest pace of growth since 1992. The escalating tariffs will no doubt add pressure to an economy already amid a slowdown. Maybe this trade war is working like the Donald says it is? China won’t be the only loser, of course, escalating tariffs could negatively impact consumers on both sides, industries and markets, and of course, our portfolios.


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