(Bloomberg) — Hello, from Washington, and a happy St. Patrick’s Day to those who celebrate. Not only are some of us wearing green today, but we’re closely watching the green economy. The US is set to introduce the toughest-ever pollution limits to automakers, adding momentum into the slow-moving shift toward electric vehicles. Here’s what you need to know for the week ahead.
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The big green moment: The Biden administration is preparing to roll out new limits on auto emissions from the nation’s cars and light trucks. The Environmental Protection Agency projected that electric models would need to make up roughly two-thirds of car and light truck sales in 2032 to meet the proposed mandates — up from less than a tenth last year. The move would put the US on track to meet its Paris Agreement commitment to at least halve the country’s greenhouse gas emissions by 2030. US carmakers have warned the initial proposal wasn’t achievable.
The news comes days after Hertz said it’s replacing its CEO after a disastrous bet on electric vehicles that the company began unwinding in recent months.
The big haul: President Joe Biden raised more than $53 million for his reelection campaign and the Democratic Party in February, a record amount for the month. The president and his party ended February with $155 million on hand, the most ever amassed for a Democrat at this point in the calendar, the campaign said. His Republican rival, former President Donald Trump, has yet to report February numbers.
The big grocery bill: Biden is regularly promoting signs of a strengthening economy and easing inflation, but when it comes to the indicator closest to home, it’s a tough sell. The surge in grocery prices since just before the Covid lockdown has been stunning: up more than 25%, a full 5 percentage points more than consumer prices overall.
The big consumer watch: With the Federal Reserve prepared to meet this week and reveal their thinking about the path for interest rates, traders are looking to a key corner of the stock market for clues: shares of companies that make the stuff Americans buy. Consumer-goods companies are struggling to start the year as companies from Kraft Heinz to Mondelez International no longer have the justification to keep raising prices with inflation ebbing.
Apart from the Fed, the coming week brings the world’s biggest collection of decisions for 2024 to date, including judgments on the cost of borrowing for six of the 10 most-traded currencies. In particular, the Bank of Japan meeting will be among the most closely watched in decades, as officials decide whether to end the world’s last negative rate now or wait until April.
The big rally: Bond fund managers have so much cash they’re turning to the derivatives market to put it to work, pushing down the cost of protection against defaults close to levels that prevailed when central banks were just starting to raise interest rates. The bets on tightening default spreads are the latest sign of the overarching optimism that’s enveloped markets, where credit investors flush with cash have been buying up large amounts of new debt and pushing back the so-called maturity wall that was a major source of concern just six months ago.
The big outlook: For bubble hunters, signs of excess aren’t hard to find, with cryptocurrencies roaring back and Nvidia surging nearly 80% since the year began. But if there’s some irrational exuberance sweeping across Wall Street, it hasn’t trickled down to one of the most speculative corners of the stock market: unprofitable technology companies. The slide in tech companies like Twilio and cybersecurity firm SentinelOne indicates there’s a limit to the optimism that has raced through markets for much of this year.
The big summer slow-down: Boeing’s disastrous start to 2024 is spilling over to airlines and their passengers as production delays exacerbate an already nascent shortage of single-aisle jets that form the backbone of commercial air travel. With the busy summer travel season in view, carriers say they’re trimming schedules and looking for alternatives to 737s they’ve already ordered, while also contending with issues afflicting Airbus. For passengers, this will mean fewer flight options and potentially higher prices on at least some popular routes. Thanks for reading. Catch you next week.
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