A Red Sweep
Environmental, Social, and Governance factors are driving investors’ appetite. The rationale behind ESG investing is that in the long run, the market will put a premium on those companies that minimize their negative externalities and maximise their positive impact on society. Since the 2008 credit crunch, quantitative easing propelled the growth of equity markets. But, is quantitative easing a friend or foe for ESG investing?
A relaxed monetary policy should at least in theory increase investors’ propensity towards assets that generate non-financial value. A massive money influx from central banks should provide enough liquidity to bolster prices of those listed firms that deliver sustainably, social equity, inclusion or low carbon growth.
But practice shows that things are different. QE is not an enabler for ESG investment for several reasons:
I never liked quantitative easing. It's misunderstood by almost everybody. Flattening the yield curve is not stimulative; flattening the yield curve is anti-stimulative. Kenneth Fisher, American billionaire and investment analyst
Latest figures from November show that the consumer price index in the United States rose to 6.8%, in line with the market expectations. Investors’ optimism returned after several weeks of significant contractions fueled by fears of the new aggressive Omicron mutant.
In addition, US weekly jobless claims dropped to 184,000, the lowest level recorded since 1969. The jobless rate dropped to 4.2% the lowest level since pre-covid times. The unemployment figures should be taken with a grain of salt, as US employers exhibit 11 million unfulfilled jobs.
Oracle Corp, one of the old leaders in the cloud and enterprise solutions
market, delivered above the market revenues for the second quarter. Oracle’s
shares rose above 100 USD amid stronger demand for cloud services. More
companies are moving towards a hybrid or full remote work model, thereby
requiring supplemental cloud capacity. While the competition amongst cloud
providers is bigger than ever, institutional clients seem to prefer robust
and scalable solutions, such as those proposed by Oracle.
Oil prices had their best week since the end of the summer. While the Omicron variant of SARS-COV2 shakes down investors’ confidence, initial intelligence about mild symptoms related to the mutant virus brought ease and optimism in the market. Two years of pandemic and a complex geopolitical configuration with tense relationships between the West, Iran and Russia put oil prices in a very volatile position.
Coffee prices reached a 10-years high amid a strong rally initiated in November. A number of factors are behind this sharp increase. First, remote work led to an increase in the consumption of coffee stemming from retail consumers. Thus, the global coffee market entered a structural deficit, where production does not meet demand. Moreover, the dislocation in the shipping market and below expectations crops due to unfavourable weather bolstered the coffee prices.
Despite being praised by inventors, SPACs mean trouble. A negative report issued by the reputed shorter Hindenburg Research smashed Tecnoglass’s price on NASDAQ. Shares of Colombia-based glassmaker plummeted by over 35% after accusations of hidden ties with the Cali drug cartel. Tecnoglass was listed back in 2013 through a SPAC merger with Andina Acquisition Corporation, a firm headquartered in New York. The report unveils that back in the 1990s, US criminal prosecutors were actively investigating the activities of the Daes brothers, who serve currently as executives in Tecnoglass. Investigators suspected the Daes of fronting the Cali cartel’s illicit activities in the US. They were allegedly playing a crucial part in laundering the illegal proceeds stemming from the sale of smuggled cocaine from Colombia in North America. Moreover, Jose Daes, Tecnoglass CEO, was imprisoned in Colombia following corruption and binary charges brought by domestic prosecutors. This case underlines, once again, SPAC’s lack of transparency.
The Dow Jones Index regained the lost territory ending the week just below 36,000. The new Omicron variant and the anticipated tapering of bond repurchase can trigger at any moment the beginning of a structural market decline.
Bitcoin ended the week above USD 48,000, after a strong rally. While the market swings will continue, technical selloff could bring the leading cryptocurrency below USD 47,000.
Oil prices boomed in the initial phase of the energy crisis. Brent surged over that past week after a certain ease related to Omicron's impact.
The Gold ounce ended the week on a positive note closing near USD 1,785. The foreseeable market contraction and the inflationary context are good arguments for believing that gold prices could soar in the near future.
General Disclaimer
The information and data published in this research were prepared by the market research department of Darqube Ltd. Publications and reports of our research department are provided for information purposes only. Market data and figures are indicative and Darqube Ltd does not trade any financial instrument or offer investment recommendations and decision of any type. The information and analysis contained in this report has been prepared from sources that our research department believes to be objective, transparent and robust.
Nope
Sort of
Good
A Red Sweep
Spooky Sell Signal
Gold Shines at New Highs
The ECB Cuts Again
Slowing Disinflation
Golden-Week Rush
China’s Massive Package
The Fed’s Big Rate Cut
The ECB Cuts Again
Banks Turn Bearish On China
Million-Dollar Gold Bar
Bonds Are Back
Black Monday
Diverging Rate Decisions
Still Strong
Smaller Is Better
The Name Is Bond, Green Bond
Landslide Victory
AI-Frenzy Takes a Break
Bye Apple, Hello Nvidia
The Fed Stays Put
An Indian Rollercoaster
The Name’s Bond, Convertible Bond
Nvidia Does It Again
A Small Relief
From Boom To Bust
Higher For Longer
Still Magnificent
Halve And Havoc
Stubborn Inflation
Choc Shock
An End Of An Era
Britain Bounces Back
China's Goal
Bye iCar, Hello iAI
Nvidia Beats Expectations
Germany Overtakes Japan
Riding The Dragon
China’s Falling Behind
India Outshines Hong Kong
Aging Dragon
US Inflation’s Accelerating
Tesla Lost Its Crown
2023 Market Wrap-Up
The Last Samurai
Fed Teases 2024 Rate Cuts
Bond Market's License to Thrill
Cyber Week Bonanza
OpenAI's Leadership Shuffle Drama
Inflation’s Cooling In The US And UK
Back Into Deflation
Triple Hold On Rate Hikes
The US Economy Is Still Flexing Its Muscles
Inflation’s Refusing To Come Down
Investors Are Bracing For A Dip
An End In Sight
Rate Hike Recess
End Of An Era
China's #1 Ambitions Are Fading
Americans’ Piggy Banks Are Running Low
Trying To Break The (Wage-Price) Spiral
China: A Nation In Deflation
Uncle Sam Gets Downgraded
Twin Hikes
Stagnating Dragon
A Tale Of Three Inflation Stories
Silver Is Shining Bright
UK Inflation: Defying Gravity
The Fed Calls A Timeout
A One-Two Punch
Shrinking Dragon
Keep Calm And Carry On
The AI-ffect Of The AI Mania
SLOOS: Crunch Time Looms
Last Republic
LVMH Pops The Bubbly
India Takes The Population Throne
The End Is Nigh
OPEC Drops the Pump
Why Gold Is Glittering
Can't Stop Won't Stop
To Hike Or Not To Hike
China’s An Underachiever
Cash Is King
What Energy Crisis?
The Name’s Bond, Japanese Bond
The AI War Has Begun
Hikes Everywhere
What Recession?
Shrinking Population
Grab Your Box And Leave
A Gloomy Prediction
It's Darkest Before The Dawn
Elon Fires Himself…
Triple Whammy
No More Zero-Covid?
Eight Billion And Counting
Another One Bites The Dust
No Santa Pause
Big Tech, Big Disappointment
Cart