Last week I wrote about Tesla and how its share price has fallen this year. The company has been an incredible success story, but the recent slowdown has raised questions about how resilient it is to challenges to its dominance, and how it meets ESG (Environmental and Social Governance) criteria.
Off the back of this, I’ve had a number of stimulating chats as to what companies are truly Sustainable. I therefore thought a catch-up with Phoebe Stone at LGT Wealth was in order, as she has a great knack for placing such matters into perspective.
The main thrust of my update today is articulating LGT’s approach as to their considerations and parameters when choosing appropriate companies/funds.
However, before we dive into all matters ‘Sustainable’, there has been plenty going on this week but once again the interest rate story has grabbed the headlines, particularly in the US, with interest rates now not expected to fall as quickly as previously forecast. Even Joe Biden has pitched in stating that he believes there may only be one rate cut this year!
Despite the rhetoric, investment markets remain relatively steady, although there have been some interesting moves in the bond market.
This week’s agenda:
- Higher for longer in the US
- What are the implications for the markets?
- LGT’s Sustainable considerations
Higher for longer in the US
With US inflation numbers rising, markets have been quick to pair back their expectations for US interest rates falling. At the start of the year, the consensus was that interest rates would fall seven times in 2024, whereas Joe Biden this week came out and said he believed it would just be one rate cut. The markets and indeed the Federal Reserve (Fed) still believe it will be three cuts, although some have lowered their expectations to two cuts. The jury is now out as to whether the first cut will be in June.
Continues…
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