E is for Earnings

Forwarded this email by a friend? Subscribe here.

Hi there,

It’s #nationalparkweek, so we hope you were able to spend some time in the great outdoors in between racing to use up your last Bed Bath and Beyond coupons. Meanwhile, it’s been a busy week for the financial markets, so let’s get caught up:

• Economy growing at 🐢 pace: Rising interest rates and inflation are taking a toll on the US economy, according to new numbers out this morning. Gross domestic product (GDP) rose at just 1.1% in the first quarter, far short of the 2% economists expected.
• Debt ceiling jitters: As the US inches closer to its debt ceiling, economists are sounding alarms over the consequences of default if it were to happen, with essays and reports warning of a “spectacular debacle” and “significant volatility.” With no signs of a final deal in Washington, some investors are channeling their nerves into Treasuries.
• Corporate report cards roll in: Earnings reports show tech companies Meta, Alphabet, and Microsoft achieved better-than-expected growth, boosting share prices. Meanwhile, McDonald’s, PepsiCo, and Kimberly-Clark saw rising sales as consumers remained willing to pay more for everyday basics like hamburgers, soda, and tissues — though customers may not be able to stomach rising prices for much longer. If earnings reports seem like an enigma to you, we break them down in our explainer below.
• Trading trends: Retail investors (that’s all of us, BTW) snapped up $77.7 billion in equities and ETFs on US exchanges in the first quarter, according to Vanda Research data. And some investing trends of the pandemic era seem to be reversing — individuals are now putting more money into diversified funds instead of single stocks, trading less actively, and pulling back from riskier options.

If you are among those investors looking to diversify your portfolio with more stocks and ETFs, a couple of new rankings out this week might give you some ideas. The Wall Street Journal lists the Best ESG ETFs for investors who prioritize environmental, social, and governance issues, and Just Capital ranks 10 Companies for Environmental Performance.

We’ve got more news below. Have a great rest of your week!

News you can use

• America’s most affordable electric car, the Chevy Bolt, is being discontinued later this year. The announcement from General Motors was expected since the automaker wants all its EVs to be based on its new Ultium battery technology, which the Bolt is not. GM is currently working with Toyota on affordable EVs priced below $30,000. Until then, the cheapest EV title will belong to the Nissan Leaf. In related news, Tesla is waging a price war and sacrificing profits.
  
• Sustainability measures go hand-in-hand with financial performance, according to a new report. Bain & Company and EcoVadis looked at 100,000 companies, finding that those with more diverse executive teams, higher employee satisfaction, renewable energy usage, and sustainable supply chains also perform higher on financial measures like revenue growth and profits.
  
• Don’t be a sloth, at least when it comes to your bank account. Axios reports that many consumers are leaving money on the table by keeping their cash in checking accounts that don’t earn interest (though they tout the benefits of lazy investing). It’s the perfect time to spruce up your savings and take a look at these other strategies for investing when rates are high.