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- Wednesday's Scoop: Tired 🌤️
Wednesday's Scoop: Tired 🌤️
BlackRock vs Republicans & Southwest's pay raises
Scoops Team
December 20, 2023
Hey friend - the OOO emails are flowing in. That usually means more market volatility.
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Here’s what you need to know today…
Big Picture
Consumers are feeling better about the economy.
Falling mortgage rates have revived home sales.
Attacks in the Red Sea could disrupt global trade.
The Market: ⬇️ -1.5%
S&P 500: 4,698.35
1Mo: +4% | 1Yr: +21% | 5Yr: +94%
The market broke its hot streak today for no major reason. With fewer people trading, markets get a little more volatile around the holidays.
Consumers have turned more optimistic about the economy. The Conference Board’s consumer confidence survey reported the highest sentiment in five months. Americans feel better about their job prospects. They’re less worried about inflation and are planning for bigger purchases again.
Falling mortgage rates have brought life back to the housing market. The National Association of Realtors reported existing home sales jumped 0.85% in November after five months of declines. Mortgage rates have started falling from their peak in October as policymakers signaled an end to interest rate hikes. A housing shortage has kept prices from falling. The available inventory of homes on the market is only half of what it was pre-pandemic. The median home price is $387,600, up 4% from a year ago.
💡We'll explain these trends a little more in our Weekly Scoop on Friday.
Global trade has been disrupted by attacks from Iran-backed Houthi militants on ships traveling through the Red Sea, one of the world’s most important shipping lanes. The Red Sea carries 14% of the world’s trade. Shipping companies have been forced to reroute around Africa, adding 7-10 days to the typical journey through the Suez Canal. Carrier prices have surged as much as 44%. However, shipping costs are still well below the inflated levels of the pandemic. The US has sent a defense task force to protect commercial vehicles.
How are you feeling about the economy? |
Company Scoops 🗣️🌎💰
💡Practice having an opinion. Build your voice. It accelerates your comprehension and comfort with these topics.
 General Mills | Pricing Pushback General Mills may finally be reaching the end of shoppers' tolerance for price increases, reporting declining sales across its food and snack lines. The packaged food giant raised prices by 3%, increasing its profit margins. |
 Southwest Airlines | Pilot Payday Southwest Airlines will boost pay by 50% over 5 years for 11,000 pilots, including an immediate 29% raise, in a $12B deal that ends years of negotiations. The airline has suffered costly meltdowns from understaffing and tech issues. |
 BlackRock | ESG Legal Battle The world's largest investment manager is being sued by Tennessee for allegedly downplaying its commitment to the climate and harming fossil fuel investors. Republican state pensions have already pulled billions from BlackRock investments. |
 US Bank | Poor Reliability The nation's fifth largest bank will pay a $36M fine for freezing benefits payment cards for tens of thousands of unemployed Americans for weeks at the height of the pandemic crisis. US Bank said it stopped $375M of fraud with the move. |
 Microsoft | Planting Trees Microsoft will fund one of the largest US forest restoration projects ever, buying marginal cropland and growing native species to capture more carbon. The tech giant aims to remove all its historical emissions from the atmosphere by 2050. |
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Inside Scoop 🤓
What is ESG, and why is it so controversial?
Environmental, Social, and Governance (ESG) metrics have surged in popularity with corporations and investors amidst growing climate and societal risks. The metrics analyze the company's broader external and internal risks, from emissions to resource use, wage disparity, diversity, leadership incentives, and more.
While the acronym has been inaccurately adopted to imply corporate sustainability or social responsibility, the rating systems are designed as risk metrics. ESG metrics are the financial industry’s technological advancement in measuring how abstract things like drought, employee health, or corruption may impact a company’s profit.
ESG has sparked controversy most prominently for factors that evaluate the negative impacts of fossil fuel pollution or the opportunities provided by a diverse workforce. Overall, the metrics aim to give investors greater insight into business practices. Most are intended to measure the impact of the world on the company's profits, not the company's impact on the world.
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