Hoping For The Best, Preparing For…

Forwarded this email by a friend? Subscribe here.

You made it to Thursday!

The first two words of Twenty One Pilots’ “Saturday” were playing in our heads as we kept up with economic news these past few days. That’s right, it seems like “slow down” is the theme of the week, as the latest Consumer Price Index data shows that the pace of inflation slowed in November, with prices up 7.1% compared to a year ago. That might still sound like a lot, but it’s less than economists had predicted and far below the peak rate of 9.1% in June. And yesterday, the Federal Reserve announced an interest rate increase of half a percentage point, a welcome softening after four straight increases of .75%.

But any celebrations were short-lived. The Fed signaled rate increases will likely continue in 2023, albeit at a slower pace, and it will need more evidence of inflation cooling before it changes course. The Wall Street Journal reports that recession fears are at the forefront once again, with the threat of a looming economic slowdown sending stock prices lower in December, although bond prices finally started to climb after a year of dismal performance. BlackRock also rolled out the word “recession” multiple times in its 2023 Global Outlook released this week, declaring that we’ve entered a new regime of greater volatility that will require a new investment playbook.

With that in mind, in today’s newsletter we share our thoughts on three industries that experts think will thrive in an economic downturn and tips for finding the sustainable players in those markets. You may also find these four tips for investing in a recession helpful as you think about your strategies for the coming year.

News you can use

• The same energy that powers the sun could someday be put to work here on Earth! A major breakthrough in nuclear fusion science has brought us closer to a new source of clean power. Scientists at a US federal research facility in Livermore, California were able to produce more energy from fusion than is required by the laser that drives it. Nuclear fusion is considered a safer, cleaner alternative to the nuclear fission technology we use today. You can learn why this is such a big deal (yes, we really nerded out on this) and read more about general nuclear technology in our Guide to Cleantech Investing.
  
• A group of institutional investors announced the formation of Nature Action 100, a new global initiative to drive greater corporate action on tackling nature loss and biodiversity decline. Announced at the UN Biodiversity Conference (COP15), the initiative will identify 100 focus companies to be targeted for investor engagement and track their progress on reversing nature loss.
  
• The SEC voted in favor of small investors on Wednesday, advancing four proposals that aim to level the playing field with high-speed trading firms. If ultimately passed, the new rules would represent the biggest changes to US trading in nearly two decades, increasing competition on retail stock trades to give individual investors better prices. The proposals will be open for public comment until March 31.