The 411 on Bonds

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Hi there,

It’s allergy season, but this week’s happenings are nothing to sneeze at. Markets are on edge as economic data and business report cards come out, and experts say the horizon is darkening. Here’s what we’re watching:

• Inflation cools…slooooowly: Consumer prices were up 5% from a year ago in March, which was better than expected and an improvement from February’s 6%, but investors aren’t celebrating yet. The Fed likes inflation to be around 2%, so many analysts say more interest rate hikes are still possible. If you’re wondering what interest rates have to do with inflation and the stock market, maybe this quick explainer from a previous edition will help. We also have a list of ways to prepare for an extended period of high rates.
  
• Earnings season kicks off: It’s time for public companies to show us how they performed in the first three months of the year and give us guidance on what’s to come. Investor expectations are low as a number of experts are predicting weak results from the majority of companies. While a few companies have already announced, all eyes will be closely watching tomorrow's results from major banks like JPMorgan, Wells Fargo, and Citigroup for more information on the economic outlook and banking crisis.
  
• Tax day is almost here: The deadline to file your taxes (April 18) is rapidly approaching, and if you haven’t gotten around to it yet you can request an extension. Remember you’ll still have to pay what you owe by the regular deadline, even if you file later. Refunds are smaller this year as pandemic programs end, so before calculating, check for any windfalls in your budget. It’s also never too early to think about protecting your savings in future years.

In the positive news department: theaters are packed with crowds keen to watch a portly Italian plumber stop his dragon-like nemesis with world domination plans. Beaten-down theater stocks like AMC, IMAX, and Cinemark soared.

News you can use

• EVs stand to get a big boost from the US Environmental Protection Agency’s (EPA) new proposal to limit automobile pollution. Though the rules don’t require a specific number of EVs to be sold each year, the EPA estimates that two-thirds of new vehicles will need to be electric by 2032 — that’s ten times greater than today’s EV sales. In other EV news, Walmart just announced plans to roll out a dedicated fast-charging network, General Motors invested in a startup developing a more sustainable way to extract lithium, and Ford will spend $1.3 billion to convert an SUV factory into an EV assembly plant.
  
• This guac is extra green. Chipotle has unveiled a responsible restaurant design (solar panels, heat pumps, EV charging, etc.) for its North American expansion. By 2024, 100 new locations will have all-electric equipment and other new features. The burrito chain aims to cut direct and indirect greenhouse gas emissions 50% by 2030 from 2019 and ties ESG goals to executive bonuses. On Tuesday it also released its 2022 Sustainability Report.
  
• One in five Americans have been threatened with a gun, nearly that share have lost a family member to a gunshot, and one in six have witnessed a shooting. These stunning stats from a new KFF survey are said to capture how pervasive gun violence is as the country records its 15th mass shooting of 2023. If you’re looking to see whether any of your investments include civilian gun manufacturers and/or major gun retailers, non-profit As You Sow’s Invest Your Values tool allows you to check a fund’s exposure to them and identify gun-free funds should you want to consider them for your portfolio.
  
• Morningstar’s Best Sustainable Companies to Own list for 2023 is out. The 50 firms included stand out from the competition (wide economic moats) and have low ESG risk scores based on their exposure to and management of sustainability issues. Ranked by ESG risk score, the top companies are Keysight Technologies, Accenture, Moody's, ASML Holding, and Experian.