Eco-Friendly Failures Hit Hard

Market Sizzle: Inflation Rises, Oil Cuts, Insurance Fails, Costco Wins ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more [Eco-Friendly Failures Hit Hard]( Market Sizzle: Inflation Rises, Oil Cuts, Insurance Fails, Costco Wins [Josh Belanger]( Jun 3   [READ IN APP](   Ever tried taking a sip of Coke and ended up dodging a cap attack? Coca-Cola’s new attached bottle caps are causing quite a stir in Europe. While they’re eco-friendly, they’re also smacking drinkers in the face. It seems like everything eco-friendly continues to be worse. Inflation Battle Heats Up The Federal Reserve’s favorite inflation measure rose 2.7% in April. This matches what economists expected. The core index, which skips food and energy prices, went up 2.8%. The 10-year Treasury yield was 4.512% on Friday, down from 4.553%. Bond prices rise when yields fall. The S&P 500 gained 0.8%. At the start of the year, many thought interest rates would drop. But early inflation data made that seem unlikely. Recent data gives hope for rate cuts before year-end. The economy grew slower than expected in early 2024. GDP grew at 1.3%, lower than the 1.6% first estimate. Investors think there's an 81% chance of a Fed rate cut this year. By September, the chance of a cut is about 47%. The Fed's inflation goal is 2%. In May, the Fed kept rates high, citing slow inflation progress. Their next meeting is June 11-12. Fed President Kashkari said rates might stay high longer to control inflation. Oil Price Spike Looms OPEC+ has decided to extend production cuts into 2025. This means oil prices may stay high, especially during the U.S. presidential election. Saudi Arabia is selling shares in its oil company, Aramco, to fund economic projects. OPEC+ will keep reducing oil output by 3.66 million barrels daily. The United Arab Emirates will get a new quota in January. Eight top producers, including Saudi Arabia, will keep voluntary cuts into 2025. These cuts aim to boost prices and avoid a global surplus. Brent crude oil is about $83 a barrel now. Higher oil prices are meant to help Saudi Arabia's economy. Compliance with the cuts has been tricky. Russia, Kazakhstan, and Iraq have overproduced recently. OPEC's next meeting will be a mix of in-person and online, with many watching closely. Costco Crushes Inflation Woes Costco is winning big during high inflation. People are paying $60 yearly to shop in bulk and save money. Costco’s shares have more than tripled in five years. The company now has a market value over $350 billion. Costco has 876 stores, mostly in the U.S. It grew during the pandemic and still does well with 3% inflation. Customers pay for membership and get low prices. Renewal rates are over 90%. Costco makes money by selling fast and in bulk. It even sells gold bars online sometimes. Costco's recent sales hit $57.4 billion, up 9.1%. Membership fees alone were $1.1 billion. Walmart’s Sam’s Club and BJ’s are also doing well. People want value, and warehouse clubs provide it. Insurance Crisis Ignites Panic Extreme weather is exposing insurance flaws. Climate change is causing more floods and fires, and insurance companies can't keep up. For four years, natural disasters cost insurers over $100 billion annually. This includes record-breaking events, even in quiet hurricane years. Insurance models are failing to predict these events. “Models aren't working,” says Lindsay Keenan from Insure Our Future. Reinsurers are losing big and tightening terms. In 2022 and 2023, U.S. insurers lost over $20 billion each year. State Farm stopped new policies in California due to losses. Experts say climate change needs better models. “We're not changing fast enough,” says William Berkley from WR Berkley Corporation. New software and tools are being developed, but the risk remains high. Scientists warn of even more extreme climate scenarios. Insurance rates are rising, and more people are relying on state-backed insurers. Quick Sizzles - Ackman’s IPO Ambition: Bill Ackman plans to take Pershing Square public by 2026. The firm is valued at $10.5 billion and focuses on undervalued stocks. - Pensions in Peril: Government pension plans face huge real estate losses. Canada’s pension sold stakes at a $225 million loss. California’s pensions also report big losses. - Oil Deal Frenzy: US oil and gas deals surge to $200 billion as top producers compete for acquisitions. Exxon, Chevron, and others are leading the charge. - Yen's Struggle: Japan spent $62 billion to boost the yen, but the currency continues to fall towards 34-year lows. The Bank of Japan faces pressure to raise rates. - Subway Bond Boom: Subway raised $3.4 billion in bonds to pay down debt. Investor demand was high, driven by Subway’s US franchise royalties and intellectual property. - M&A Revival: Global M&A deals total $1.3 trillion in 2023, up 23% from last year. UK and US lead the surge, with energy and telecom sectors driving growth. That’s today’s Market Sizzle; Good Trading, Good Life! 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