Succinct Summation of Week’s Events 9.22.17 (plus Green Assets)

The usual Sunday night weekly summation is below with all three indexes again making new all-time highs.  The bonus this Sunday is a Bloomberg article exploring the issue of ethical investing.  No, this doesn't mean insider trading.  Rather it refers to a developing trend where the stock market can represent an opportunity to support the issues and companies that you feel are ethical, that indeed there are ways to be an activist citizen beyond the ballot box.  This particular article focuses on companies that have active environmental policies for investors who agree with that position.  WealthTrack had an episode on this same topic a few weeks ago entitled, "Socially Responsible Investing," and I will plan to make a brief presentation on this at the October meeting.

Succinct Summation of Week’s Events 9.22.17

September 22, 2017 5:00pm by Barry Ritholtz

Succinct Summations for the week ending September 22nd, 2017

Positives:

1. S&P 500, Dow Jones Industrial Average, and NASDAQ Composite all made new all-time highs. Yay!
2. Index of leading economic indicators rose 0.4%, above the 0.2% expected increase.
3. Import and export prices both rose 0.6% m/o/m, well above the 0.4% and 0.2% expected increases.
4. Initial jobless claims fell from 284k to 259k.
5. Housing starts came in slightly higher than expected, at a 1.18 million annualized rate, above the 1.173 expected.
6. Housing permits came in at a 1.3 million annualized rate, above the 1.22 million expected.
7. Philly fed business outlook survey rose from 18.9 to 23.8.

Negatives:

1. Dear Lord, this God-damned Obamacare thing, yet AGAIN?
2. Existing home sales came in at a 5.35 million annualized rate, below the 5.48 million expected.
3. MBA mortgage purchase applications fell 11% w/o/w, refinances fell 9%.
4. Housing market index survey fell from 68 to 64, below the 66 expected.
5. Continuing with the housing theme, the FHFA housing price index rose 0.2% m/o/m, below the 0.4% expected increase.
6. PMI composite flash came in at 54.6, below the 54.9 expected.

 

 

Investors Seeking Green Assets Make Companies (Somewhat) Cleaner - Bloomberg  

 

 The narrative is below but check out the above link for some nice graphics.  

Investors Seeking Green Assets Make Companies (Somewhat) Cleaner

Absence of competitive advantage inhibiting green investment flows

By 

Jeanette Rodrigues

September 21, 2017, 5:00 PM EDT

From  Bloomberg

Growing investor appetite for low-carbon assets is pushing companies to hasten their transition to clean energy, but not nearly fast enough.

About 68 percent of global investors intend to increase green investments and one-in-two companies has a strategy to reduce their environmental impact, according to a survey commissioned by HSBC Plc published Sept. 12. However, only 43 percent of companies disclose their plans and 56 percent of investors say current disclosure levels are "highly inadequate," the survey shows.

“The global transition to a low-carbon, clean energy economy is now firmly underway, yet companies and their investors are clearly traveling at different speeds," said Daniel Klier, HSBC’s group head of strategy and global head of sustainable finance. "If we are to direct the world’s capital towards low-carbon investment opportunities then we need to break through the barriers currently inhibiting its flows."

When asked what would goad them to be more transparent, most companies said they lack any clear competitive advantage from doing so, particularly regarding cost of funding. Only 66 percent of the investors surveyed hold green bonds, which isn’t surprising given that total outstanding issuance is relatively small at $232.2 billion in July, according to the report.

The report estimates that about $90 trillion of investment is needed in new green infrastructure over the next 15 years. In 2016, $22.9 trillion of assets were managed under responsible investment strategies, a 25 percent increase from 2014.

The survey was conducted by East & Partners over the four weeks through July 11. They interviewed finance and investment chiefs at 507 companies and 497 investment houses across Europe, the Americas, Asia and the Middle East.

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