Monday's Scoop: Green🌤️

Hey friend - Happy Earth Day! Pick up a piece of trash today, or try to waste a little less water. Maybe make it a habit. Go nuts and help preserve the planet.

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Here’s what you need to know today to inform your work, spending, and investments…

1. Policymakers think everything is overpriced.

2. Corporate first-quarter financial reports have been underwhelming so far.

3. It’s more challenging for startups to find investors this year.

Inflation Rate: +3.5% (YoY), +0.4% (MoM)
^{Policymakers aim for 2% YoY inflation (CPI)}

Policymakers think the financial system is sound, but everything is overpriced. The Federal Reserve’s Financial Stability Report reassured the public that banks are stable and there are no major red flags across the financial system. Still, the Fed did highlight that basically every financial asset, from stocks to commercial and residential property, is overpriced. Consumer and business debt levels are rising, but not much faster than average, and income-to-debt ratios are reasonably low. However, delinquencies are rising quickly for auto loans and credit cards, particularly for borrowers with low credit scores.

The Market: ⬆️ +0.9%
S&P 500: 5,010.60
1Mo: -4% | 1Yr: +21% | 5Yr: +70%

The market bounced back on Monday from a nosedive on Friday sparked by Israel's retaliatory attacks on Iran. Both military offenses seem to have been intentionally de-escalators, so World War 3 fears have subsided somewhat.

Corporate financial reports have been pretty underwhelming so far. We’re about 15% of the way through the first quarter of corporate financial updates, and about 75% have reported higher profit than investors projected. That’s about average for the earnings seasons of the past decade, according to FactSet. Sales have been disappointing, with only 58% of companies outperforming expectations. That’s well below average.

It’s been harder for startups to find investors this year. Research firm Preqin said US venture capital funding was 29% lower in the first quarter than the prior year. The industry has suffered a steep decline since the investing boom in 2021. Global venture funding fell in 2023 to the lowest in six years despite transformational advances in artificial intelligence and other technology.