Bubbling Up From Below

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It’s time to stock up on hot cocoa and brace for the six more weeks of winter that Punxsutawney Phil predicted this morning. While hibernating indoors these past few days, we’ve been following several market and economic developments that will have implications for your investments. Here are the highlights:

• Stocks ended January on a high 🎵, with the S&P up 6.2%, the Dow up 2.8%, and the Nasdaq up 11%. What that means for the rest of the year is anyone’s guess — some experts warn that it’s an ominous sign, while others say a strong January is typically the start of a strong year.
  
• Corporate earnings continue to roll in. General Motors shares soared after the automaker announced strong Q4 profits and a $650 million stake in Lithium Americas to shore up its EV production supply chain. ExxonMobil posted a record-breaking $56 billion profit for 2022 (yes, you read that correctly — $56 billion in profits in one year), renewing political attacks on the oil industry. Pfizer, meanwhile, is preparing for a slower year as demand for COVID-19 products drops. Eyes are now on Alphabet, Amazon, and Apple, which will all release earnings after markets close today.
  
• The US Federal Reserve is slowing its interest rate hikes. On Wednesday, the Fed announced its eighth rate increase in the past year, raising its benchmark rate by a quarter point — compared to a half-point rate hike in December and four three-quarter point hikes before that. The news comes amid signs of cooling inflation and consumer spending, but the Fed made it clear it would keep raising rates until inflation gets down to a target of 2%. Guess we will keep those high-yield savings accounts at the front of our minds for a bit longer.
  
• Recession clouds are lifting a bit, as the International Monetary Fund upgraded its World Economic Outlook for 2023 with a projection that the global economy will grow 2.9% this year.

There’s also been a slew of new reports showing growth in the clean energy sector, which you’ll find in our News you can use section below. We take a deep dive into one form of clean energy, geothermal, as we turn our thoughts to heat. Stay warm out there!

Asking for a friend….

We know there is a lot to think about these days, and it can sometimes be a bit overwhelming. To help with those nagging questions and so you have useful resources at your fingertips, here are few links to resources and past stories relevant in these turbulent times:

• Some of our favorite inflation-fighting strategies (and a few more)
• Unpacking the ESG Alphabet Soup (including a link to our ever-growing glossary of common terms)
• FWIW Guide to Cleantech Investing: Sectors to Watch (covering a dozen innovative sectors to anchor your research on sustainable investing options)
• How to Practice Faith-Based Investing
• “Siri, What Is a Recession?”

News you can use

• The clean energy market is on fire 🔥. A new BNEF report shows that investments in clean energy technologies reached a record-setting $1.1 trillion in 2022. Meanwhile, many reports say the war in Ukraine will impact global energy markets in 2023 as the amount of electricity generated from fossil fuels in the European Union could drop by 20% this year, according to Ember, a UK-based energy think tank. Coming off strong earnings reports from the oil giants, it is interesting to also see news about changing EU consumption expectations leading energy giant BP to cut its long-term oil forecast in its latest Energy Outlook.
  
• Black History Month is upon us, making it an excellent time to examine whether your investments are helping advance racial justice. Morningstar has a great roundup of funds that address systemic racism and the wealth gap. We also shared a few ideas for assessing the racial equity impact of your investments in this article last year.
  
• Amazon is on track to operate on 100% clean energy by 2025. Not content with simply being among the world’s largest retailers, data center operators, and streaming services, Amazon is now among the leading utilities globally, according to a Bloomberg New Energy Finance researcher. Its renewable energy portfolio is now large enough to power about 5.3 million homes.