Amid growing concerns that the aggressive stimulus policies will fuel a spike in inflation, exchange traded fund investors have been dumping fixed income assets.
By Mark Hackett
In the impressive market recovery since last March, the S&P 500® Index rallied 77%, largely in response to unprecedented monetary policy accommodation by the Federal Reserve. The FOMC cut the Fed Funds target rate to 0% on March 15, 2020 and accelerated its bond-buying program to provide liquidity and avoid a deflationary spiral. Concerns were growing that the economic shutdown and shifts in consumer behavior would keep inflation below the Fed’s 2% target. At the recent FOMC meeting, Fed Chair Powell reiterated the central bank’s commitment to a dovish monetary stance until inflation targets are achieved. The data continues to show modest inflation, with consumer price inflation (CPI) up just 1.4% from a year ago despite pressure from commodities and housing. This marked the 11th-consecutive month that CPI was below the 2% target. Since the target was first announced by the Fed in 2012, inflation has exceeded 2% in 38% of months, but only five times in the last
From Large Cap to All Cap: Introducing the S&P MidCap 400 ESG and S&P SmallCap 600 ESG Indices
By Mona Naqvi, Senior Director, Head of ESG Product Strategy, North America, S&P Dow Jones Indices
Whoever said size doesn’t matter, wasn’t talking about ESG. For years, we’ve known that larger companies tend to fare better when it comes to sustainability.[1] But thanks to the launch of the S&P MidCap 400
® ESG Index, that may be about to change.
As per the S&P ESG Index Series Methodology, the indices aim to offer benchmark-like returns and improved sustainability profiles relative to their benchmarks (see Exhibits 1-3). Above all, however, they represent a new sustainable frontier in a space left largely untouched by ESG indexing to date. Indeed, scant reporting of sustainability metrics among smaller-sized firms has thus far dampened ESG efforts below a certain cap size. But thanks to the rules-based selection process and direct company engagement of our annual Corporate
Meanwhile, Comex copper futures rose 4.2% to $4.069 per pound.
Copper demand and prices “should continue to benefit from a recovering global economy and [a]transition to ‘green’ energy sources,” Brent Cook, an economic geologist and senior adviser for the newsletter Exploration Insights, told MarketWatch.
The base metal is also finding support from the supply side. Metal miners suffered production slowdowns due to COVID-19 restrictions, and while supplies should pick up speed in 2021, the market will likely continue to be unable to meet demand in the years ahead.
Diving into Copper’s Supply and Demand Dynamics
Cook argued that estimates for supply increases range between 1.5% and 3.5% while demand is “projected to significantly exceed supply.” The supply deficit is projected to increase over the next five to 10 years “primarily due to a dearth of new copper deposit discoveries, the time line to bring a deposit into production,” which can reach for a large deposi