Plus: how Uber saves lives January 8, 2024 Sign Up | View Online IN THIS ISSUE 7 min read 💸 Cheque changes 🚘 Lifesaving Lyfts 🪙 Crypto comeback? Personal breathalyzers never really caught on as a way to deter drunk driving. What has worked is an app you probably have on your phone. | Universal Pictures THE WEEK IN MARKETS New Year, Same Big Question Annnnd we’re back. The S&P 500 finished the week down about 1%, while the TSX was flat. Is that an ominous sign for 2024? Not necessarily. The trader and writer Brent Donnelly pointed out that stocks often rise at the year’s end, as investors make tax-related trades and are overcome with holiday merriment. And when this happens, markets usually reverse a tad in January when those dynamics disappear. Whatever the cause of last week’s action, investors are facing the same question they’ve faced for months: will inflation cool enough for rates to fall without a recession? A U.S. jobs report Friday suggested this outcome is still very much in the cards. We’ll learn more this week when we get fresh U.S. inflation data and the first wave of fourth-quarter earnings reports. Stay tuned. THE WEEK IN ONE NUMBER 246x How much more Canada’s highest-paid CEOs make than the average worker, up from 174x in 2008. WHAT HAPPENED LAST WEEK IMPORTANT Wall Street feels A-okay about 2024. Bloomberg collected 2024 predictions from more than 650 banks, advisers, and asset managers, and the consensus was — positive! The general view: inflation will fall, rates will come down, the economy will grow, and stocks will rise but not hugely. That said, as we’ve reported, Wall Street predictions are notoriously wrong, and they were especially off last year, when a much-fretted-about recession never showed up. Maybe forecasters will be more on the money this year? Who knows, but, according to Bloomberg, if prognosticators whiff again, we’ll be “facing either the mother of all rallies or a selloff for the ages.” Fair warning: your paycheque might shrink in 2024. And you can blame (or thank?) changes to the Canada Pension Plan. Canadians will contribute 5.95% of their income (as always) up to $68,500 to the CPP. But beginning this month, 4% will also be taken out of whatever income you earn from $68,500 to $73,200. The good news? With this pension revamp, some folks retiring 40 years from now will be eligible to receive 50% more income than current pensioners. INTERESTING Uber is a literal lifesaver. Uber and Lyft have no shortage of critics, for one reason or another. But, to their credit, a recent study published by MIT suggests that ride-sharing services have led to a 5.2% decline in traffic fatalities where they operate by keeping drunk drivers off the road. That’s meaningful! About 30% of traffic deaths in the U.S. and Canada result from drunk driving, and any drop in that number pays dividends; the MIT paper found that ride-sharing services have a lifesaving benefit of US$6.8 billion a year. To paraphrase Bloomberg’s Tyler Cowen, maybe our tech overlords deserve some thanks now and again. As for their sky-high valuations, we’ll leave that to the market. No chip gear for China. To make the bleeding-edge semiconductors that power AI and other advanced tech, you need lithography machines, which print designs onto silicon with real-life magic. And there is exactly one company, the Dutch firm ASML, that makes top-flight lithography machines. The U.S. considers this chip gear so important to its and its allies’ national security that, according to Bloomberg, American officials pressured the Netherlands to block shipments of ASML machines to China before an export ban took effect this month. The move illustrates how far the U.S. will go to limit China’s chip-making abilities so it can’t, say, make AI war robots to invade Taiwan. The trouble for ASML is that in Q3, 46% of its sales were to Chinese firms, so being caught between two superpowers could prove costly. TLDR PODCAST The TLDR Podcast wants to solve your problems. Are you trying to get out of debt? Or wondering how to save for retirement? Or curious whether you should put all your money into gold bars? We might be able to help. For an upcoming episode of the TLDR Podcast, we’re answering listener questions. So if you’ve got one, record a voice memo and send it to TLDRpodcast@wealthsimple.com. You can listen to this week’s episode on Apple Podcasts, Spotify, or Google Podcasts. —Sarah Rieger & Jared Sullivan FROM OUR SPONSORS THE FOMO INDEX by Stacey Woods IMPORTANT 🧬 23andMe blames victims for data breach. Says something in their genes makes them want to expose their personal information. Source 🛬 New ranking of North American airlines puts Air Canada last in on-time flights, so technically they’re first in late flights. Source 🎥 Original Mickey Mouse enters public domain and will appear in his first horror film. Apparently, Fantasia wasn’t a horror film. Source 🚗 China’s BYD surpasses Tesla as world’s top EV maker. Sure, it’s easy when your CEO isn’t busy blowing up rockets. Source CRASH & BURN TO THE MOON 🚗 Fidelity believes X is worth 71.5% less than Elon paid for it, but at least it’s 28.5% more despised! Source 🚲 Some of Toronto’s new bike-path signs contain spelling errors, like “trial” instead of “trail.” Nation’s 3rd-grade teachers inconsolable. Source 🍫 Woman sues Hershey’s because Reese’s Halloween candies look different on the package. Don’t tell her Cadbury Creme Eggs aren’t from chickens. Source 🚀 To boldly go where no nerd has gone before: Ashes of Vancouver Star Trek superfan will be shot into space. Source WHO CARES WHAT’S UP THIS WEEK Big U.S. banks and investment firms release earnings (Friday). BlackRock, Wells Fargo, Citigroup, and JPMorgan Chase share their Q4 results. Taiwan elects a new president (Saturday). In this consequential election, voters will decide whether Taiwan (and its semiconductor industry) gets cozier with Beijing or the West. DON'T BE A TLDR HOG 🐷 Like TLDR? The first five million people to click this link can share it with a friend for free. (You can share it with enemies too but only if you’re ready for them to love you.) THE BIG IMPORTANT STORY #TOTHEMOON 2024: The Year of the Crypto Comeback? On the first day of 2024, Bitcoin did something it hasn’t done since way back in April 2022: it surpassed US$45,000, or CAD$60,000. This was very welcome news for crypto bulls, who suffered excruciating losses in 2022, when Bitcoin and Ether fell by more than 70% from their peaks. Last year was a different story, with Bitcoin surging by more than 150%. While it’s still 30% south of its all-time high, its dramatic recovery has led to a lot of “we’re so back” tweets and fuelled speculation about whether 2024 will be the year of the Great Crypto Comeback. We don’t make predictions here at TLDR, but we thought we’d dive into why the #tothemoon crowd thinks the crypto winter is thawing — and, crucially, how the crypto market might be changing. Remind me: why did crypto crash? The crypto world suffered some painful blows in 2022, including the implosion of not-actually-very-stable stablecoin networks and the arrest of FTX CEO/noted cargo-pants proponent Sam Bankman-Fried. But the thing that really crushed cryptocurrencies were interest-rate hikes, which encouraged investors to dump speculative investments and hold more cash, and cryptocurrencies are basically the poster child of speculative investing. Why is crypto surging again? Potential interest-rate cuts have something to do with it, but, crucially, institutional investors have also lent the crypto industry some much-needed credibility by incorporating crypto into the services they offer. Asset-management giant BlackRock has filed for approval to launch a crypto ETF, which could get the green light any day, and Deutsche Bank and Visa have partnered with crypto firms for various projects. Adding to the crypto optimism, blockchain technology has found some real-deal use cases, namely as a way to transfer money globally. So is the rally warranted or just froth? Who knows! There are reasons to be bearish and bullish. If you’re bearish, it’s probably because regulators haven’t exactly warmed to crypto, in part because some key industry players still tend to balk at traditional financial rules and crime is still far too common in the space. (In 2022, US$20 billion worth of crypto transactions were illicit, according to one report.) And none of that bodes well for crypto long term. If you’re bullish, it’s probably because some major coins, namely Bitcoin and Ether, seem to be decent, if volatile, stores of value — plus the thing driving the rally is not basement traders looking to make a quick buck, as in 2021, but the fact that establishment institutions are slowly embracing crypto, which could help it become the Currency of the Future, or whatnot. Both views can’t win out! It’s just too early to say which will, and some of this year’s big regulatory battles could shape the outcome. —Sarah Rieger OTHER VERY GOOD READS 👪 Multigenerational Living Makes Sense. That Doesn’t Make it Easy Living with your parents has economic benefits. It can also be exhausting. | The Walrus 📷 How a Small-Town Saskatchewan Business Retrieves Memories A company in a town of just 1,900 is bringing old film back to life. | Financial Post 🩺 My Unravelling He had his health. He had a job. And then he didn’t. | NYMag* *Article is paywalled, which, yeah, is kind of annoying. But we think good journalism is worth paying for. THE WISDOM OF TWITTER X Pearson? Also zero razzle-dazzle. 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), Nikki Holmes (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). 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. 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