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Premarket stock: Water is running low.the market should pay attention

The market is watching. The S&P Global Water Index, which tracks his 50 companies worldwide involved in water utilities, infrastructure, equipment and materials, outperforms the S&P Global Broad Market Index by more than 3 percentage points. It started in late 2001 and has grown each year. So far this year, the Global Water Index has returned him nearly 5% higher than the S&P Global BMI.

Climate change could make these extreme droughts a daily occurrence. Last year, the United Nations Intergovernmental Panel on Climate Change reported that droughts, which previously occurred only once every decade, now occur on average 1.7 times every decade in dry regions. I understand. As the Earth warms another 2 degrees Celsius, the once rare phenomenon he will occur about 2.5 times a decade.

What it means for the market: The stress on public budgets makes it difficult for governments around the world to solve water access and drought problems on their own. Publicly traded companies are increasingly likely to be part of the solution, with analysts predicting upside opportunities.

Tianyin Cheng, senior director at S&P Dow Jones Indices, wrote:

A recent World Economic Forum report estimates that by mid-2022, the global seafood industry will be worth $483 billion. Investor Interest: There have been 23 water funds launched in the last five years with total assets of $8 billion, according to Morningstar data.

Common holdings of these funds include utilities such as: american water company (AWK)Georg Fischer AG, a Swiss company working on the safe transport of water, and water technology companies such as xylem (xyl)forecasts annual revenue growth of approximately 5% Until 2025.
Consolidated water (CWCO)Recycling wastewater into drinking water is also gaining analyst attention. Its stock is up 52% ​​this year, while the broader S&P 500 has seen him drop nearly 19% over the same period.

Rising tide: On the other side of the equation are companies that sap water resources and do not address drought as a critical issue for their business operations. A recent analysis by environmental disclosure platform CDP and non-profit think tank Planet Tracker showed that publicly traded companies could face at least $225 billion in losses from water-related risks.

Also in August, sustainability investment group Ceres Valuing Water Finance Initiative, with 64 US and international investors representing $9.8 trillion in total assets under management. Investors include pension funds and asset managers such as Franklin Resources.Ceres says tHis funding will put pressure on companies to pay more attention to their impact on water quality and availability. Participants will consider additional steps for “escalation,” such as voting against company directors who don’t make the necessary changes, they say.

big man of wall street

After a relentlessly quiet summer, the stock market will have many reactions this month.among key central bank decisions around the world (and at least eight U.S. Federal Reserve Board members) I’ll talk only this week), big bank CEO testifying in Congress and some changes to the crypto market will have investors to digest and deal with. Not to mention a plethora of economic data that will tell us whether the labor market is booming, whether consumers are still shopping.

Historically speaking, this is not a great month for markets. But September is a definite month. The fresh air blows away the last haze of August in him, allowing him to see ahead. Here’s what we’ll see over the next few weeks.

A crucial week for central banks

The Federal Reserve is one of the most influential forces in the current market as officials consider further rate hikes later this month to fight inflation. Investors are watching closely for clues as to what it will do. Central bank decisions on rate hikes are expected around the world and are expected to impact both European and US markets.

— September 7th: This is a central bank jackpot as Cleveland Federal Reserve Governor Loretta Mester, Federal Reserve Vice Chairman Lael Brainard and Vice Chairman of Supervision Michael Barr release their respective economic outlooks. is. Additionally, the Fed will publish the Beige Book, which outlines the state of consumer spending, sentiment, and housing demand in the Federal Reserve’s 12 districts.

Outside the US, the Bank of Canada has also announced decisions on where to set its benchmark interest rate.

— September 8th: The Fed’s celebration continues as Federal Reserve Chairman Jerome Powell speaks from the Cato Institute at 9:10 a.m. ET. The last time Powell spoke at Jackson Hole, he said the economy should expect some pain on the horizon, which rocked markets.

The European Central Bank will also announce a decision on where to set the benchmark interest rate.

–September. 9: This week’s Fed Gala concludes with speeches from Chicago Fed Presidents Charles Evans and Christopher Waller.

data onslaught

Key economic data showing the trajectory of US inflation will be released next week. This is the last data before the Fed decides how interest rates will move, and investors are watching closely for signs that inflation may ease.

–September. 13: The Consumer Price Index (CPI) for August has been released. It measures changes in the price of goods and services, and the Fed pays close attention to this number.

–September. 14: The Producer Price Index (PPI) for August has been released. This is the Fed’s favorite inflation indicator. Measures changes in input prices for raw materials, semi-finished products, or finished goods and services.

–September. 15: The Bank of England announces its decision on where to set its benchmark interest rate. In the US, August retail sales will also be announced. These are important indicators of personal consumption, which accounts for a large part of economic activity.

Focus on DC

The penultimate week of September is probably the most newsworthy week. Investors have been waiting for the Fed’s next move since his July, finally meeting this week to announce the range of rate hikes. Wall Street CEOs may also congregate on The Hill to talk about banking policy and give updates on where. They predict the economy is headed.

–September. 20-21: Members of the Federal Open Market Committee (FOMC) meet to vote on where to set the target interest rate. Traders will keep an eye on this decision and the post-decision press conference with Fed Chairman Jerome Powell. Any surprise could plunge the US market.

— September 21-22: Brian Moynihan, Bank of America; Charlie Scharff, Wells Fargo; Jamie Dimon, JPMorgan Chase; Jane Fraser, Citi; Bill Demchak, PNC; All of Roger testified in annual reports to the Senate and Congress. will tilt the

pass the tip

This is another development in the longstanding US-China rivalry.

The Biden administration on Tuesday announced plans to invest $50 billion in the U.S. semiconductor industry. Aimed at shaping vital industries and competing with China, the Department of Commerce has announced how his CHIPS for America Fund will be distributed. part of the act signed into law in July.

According to the White House, the approximately $28 billion fund will be used for grants and loans to help build advanced, state-of-the-art chip manufacturing facilities. In addition, he said the $10 billion will be used to expand manufacturing of older generation technology used in automobiles and communication technologies such as smartphones. The last of his $11 billion will be used for research and development initiatives related to chip manufacturing.

The Commerce Department could start accepting applications for funding from companies by February and start distributing funds by next spring.

The United States was once the leader in semiconductor chip manufacturing, but it has stepped into other countries like China. Many American manufacturers now import chips that are essential in making cars, smartphones and medical devices.

as colleague Rishi Iyengar reported, Taiwan further complicates matters. An autonomous island off the coast of China has become a diplomatic and military hotspot between Washington and Beijing. Taiwan is important to the global semiconductor industry, with some of the world’s top manufacturers headquartered in Taiwan.
The new funding is intended to help companies move chip manufacturing back to the United States, thereby reducing costs and preventing supply chain disruptions. Reporting to colleague Katie LoboscoThe current global chip shortage is limiting the production of new cars, and Americans, for example, are facing skyrocketing car prices.


Earnings from GameStop.

Apple will announce new products at 1pm ET, and the Federal Reserve will release the US Beige Book.

come thursday: Federal Reserve Chairman Jerome Powell speaks at the Kate Institute. US Weekly Unemployment Claims. ECB rate decision; Japan’s GDP.


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