Bitter truth behind chocolate: cocoa market in deep crisis
- Cocoa prices soar; shortage from weather, disease impacts
- Record deficit, over-sold futures cause price spikes
- Stabilisation attempts; high prices challenge producers, buyers
The cocoa market is reeling. Failing harvests are sending futures prices vertically upwards, and a solution seems far away. Daredevils looking to get in now are taking the risk of investing in a derailed market.
‘A company’s ESG score says nothing about its returns’
Better ESG scores of listed companies do not necessarily lead to higher equity returns. Contrary to the claims of numerous asset managers, this link cannot be scientifically proven, according to researchers from Erasmus University and Boston University.
More analysts expect zero Fed rate cuts before end of year
Increasing numbers of analysts are now forecasting that the Federal Reserve will not implement any rate cuts before 2025. This follows an unexpected rise in US inflation in February, suggesting that the Federal Reserve may postpone any thoughts of reducing rates. Despite previous market expectations of an interest rate cut in June, experts at Vanguard, Apollo, and other institutions are now suggesting that the Fed could maintain current interest rates throughout the year.
Market unmoved by Biden’s plans to tax wealth
US President Joe Biden has outlined his ambitions for comprehensive tax reforms targeting large corporations and private equity funds, with the market’s attention remaining steadfastly on interest rates.
President Biden’s ideal scenario would see businesses shouldering higher tax burdens, a reduction in executive compensation, and a quadrupling of the costs for shareholder buybacks.
Private investments hold back university fund returns
Private investment-laden portfolios of US university funds achieved a net return of 7.7 per cent in FY2023, but the gains were almost entirely due to public equities.
Historically, university funds with larger endowments tend to achieve better one-year investment returns than funds with smaller endowments due to significant allocations to private investing. The rise in the US stock market and disappointing returns on alternative investments reversed the trend in 2023.
SEC likely to deviate from European climate reporting rules
The Securities and Exchange Commission (SEC) is about to scrap the requirement for Scope-3 reporting. In doing so, the US stock market watchdog is driving a wedge between US legislation and the new European rules from the Corporate Sustainability Reporting Directive, or CSRD that will apply from next year.
Weak yen crowns top Japanese companies as ‘Seven Samurai’
That Japan unexpectedly slipped into recession will make the market care. Profits of listed companies are soaring, and share prices are peaking. Investors say there is much more in store, but the yen must continue to cooperate.
Goldman Sachs already refers to the “Seven Samurai” in its notes to clients, alluding to the classic Akira Kurosawa film, later remade in the US as “The Magnificent Seven.”
Billions of euros flow out of European property funds
Investors have been liquidating billions of euros in assets in European real estate funds for a year now. German investors in particular have been remarkably active in selling their property positions.
Picks-and-shovels strategies alive as Nvidia fuels AI gold rush
Artificial intelligence and semiconductor stocks rallied late Wednesday during after-hours trading after Nvidia wowed Wall Street with its Q4 earnings. Investors seem to bet on more demand for “picks-and-shovels” in today’s AI-gold rush, echoing dot-com optimism according to some.
‘Tokenisation is the next step for asset management’
Tokenisation is the next step for the asset management industry. So says not only Larry Fink, Blackrock’s CEO, but also Jeroen van Oerle, manager of Lombard Odier’s fintech strategy. He sees the potential impact mainly in private markets.