#2 Daily Financial News Round Up - Nov 2,2021
Market Snapshot
Dow Jones is up by 0.42% compared to yesterday’s 0.16%, S&P500 is up by 0.40% compared to yesterday’s 0.03%, and Nasdaq Composite is up by 0.22% compared to yesterday’s 0.34%.
How’s crypto-market?
Bitcoin is up by 4.91% compared to yesterday’s 0.96%. The top three traded cryptocurrencies in the last 24 hours are Looping, Decentraland, and Polkadot. It’s all green in the leading cryptocurrencies, but Shiba Inu is down by 2.60%.
What news caught my attention?
More than 100 countries’ leaders are meeting in the U.K. for COP-26, i.e. the 26th U.N. Climate Change Conference of the Parties. The key proposal is to implement using tariffs on trade to cut carbon emissions. Economists have been proposing taxes to curb climate change for decades, which seems to be a step in the right direction. However, this rule can have huge ramifications. Energy-efficient countries will suddenly find themselves at an advantage, while energy-inefficient governments will be slapped with extra costs causing them to be at a disadvantage. The immediate impact might be in the form of increased prices to consumers. In the long term, the increased costs can potentially result in energy inefficient countries losing business. On the other hand, the anticipation of the loss of business in these countries can force them to move to energy-efficient processes - which is the intended impact of the rule. However, as history has shown us, regulations or laws always have unintended consequences in the form of rule-skirting. Countries with energy-inefficient processes might engage in manipulation. There are some concerns that this rule is another form of protectionism. Let’s wait and watch what the implications of this rule will be. For now, the environmental activist in me is happy about this proposed rule.
Even though there are more Uber and Lyft drivers, the prices remain high. Why? Because the demand outstrips the supply. There is still a short supply of drivers. Unemployment benefits and rethinking of workers’ lifestyles resulted in fewer drivers coming back to meet the required demand. Even if the driver shortage is resolved, we should expect the prices to remain high and not return to pre-pandemic low levels.
Workers saw a boost in their compensation. However, at the same time, consumer prices rose at the fastest pace in 30 years. The wage increase might mean nothing with the rise in inflation. Supply chain problems combined with worker shortage is exacerbating the inflation concerns.
My Takeaways:
Despite inflation concerns, the stock markets seem to be soaring. Dow crossed 36000.
The tariffs on trade to cut carbon emissions will likely have huge ramifications - pricing, financing, strategy.
Inflation continues to be a concern, and let's watch Fed’s actions to curb inflation closely.