Thursday, May 19th 2022

Three Things (5/19)

Commentary

“The secret of success is to do the common thing uncommonly well.” – John D. Rockefeller

1) Tesla excluded from S&P ESG Index

  • S&P Global announced that the world’s largest electric car maker has lost its spot in the ESG version of the S&P 500 index.

  • The ratings agency cited concerns related to working conditions and handling of issues linked to its driver-assistance systems contributed to the company’s exclusion.

  • The move is a result of the company sliding in the ranks compared to improving global peers.

Titan’s Takeaway: As ESG issues remain a focus for board rooms across America, Tesla’s removal sparked pushback from its CEO, Elon Musk. The exclusion at face value may not make sense but serves as an acknowledgment of the agency’s emphasis on the ‘S’ and the 'G’ when applying Environmental, Social, and Governance scores.

2) The world pulls back on international trade

  • Supply chain backlogs and inflation fears have caused countries to emphasize protectionism as concerns of food scarcity rise around the world.

  • India and Turkey are two countries that have banned exports of certain goods such as wheat, beef, and cooking oils.  

  • Shortages of fuel and fertilizer in many countries have accelerated the prices of food as well. 

Titan’s Takeaway: The unwind of international trade further exacerbates the supply chain and rising price concerns around the globe. As decisions to turn inward become more commonplace, concerns of a global food crisis continue to haunt many world leaders.

3) Home Depot shows resilience amid inflation pressures

  • The home-improvement retailer boosted its outlook after the demand for home supplies persists despite weaker consumer sentiment.

  • The company emphasized the resiliency among its customer base, indicating they have not seen a change in consumer behavior yet.

  • Home Depot believes appreciating home values have helped drive consumer spending.

Titan’s Takeaway: Inflation continues to be blamed for issues around corporate America yet Home Depot assures that it hasn’t impacted what customers are buying as the average purchase price surged 11% year over year. Prices are rising yet consumers are still willing to spend on larger ticket items.

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