As geopolitical factors lead to a reevaluation of a number of beliefs in the spectrum, currently -- like the first half of the year – the terrain continues to be rife with environmental, social and governance (ESG) matters, according to corpgov.law.harvared.edu.

While some forecasts laid out by the group in its February post “ESG: 2021 Trends and Expectations for 2022,” were on the dime, other were stymied by unexpected circumstances.  They included, for instance, the reverberations from the Ukraine invasion, a spike in regulatory scrutiny and some blowback from U.S. Supreme Court rulings. 

During the first six months of the year, the Russian intrusion of Ukraine took a hefty toll on ESG trends and performance, according to the site. The fire was lit under oil and gas prices, while the performance of ESY-focused funds lagged.

Then there’s the bigger picture, in which 47% of advisors concur that ESG investments in DC plans would play a role on environmental, social, and corporate governance on a macroeconomic level, according to loma.org. Occasional advisors? Well, they’re more likely to expect ESGs in DC plans to impact conditions more widely. 

While a far cry from the size and scope Dems were originally hoping for Biden’s multi-agenda bill will hit his desk after passing the house, but what does this mean for the market and the U.S. economy? The bill is $430 billion dollars and will change taxes, healthcare, and climate policy. The plan hopes to slash carbon emissions by 40% within the decade spending a hefty $369 billion. However, it plans to generate $737 billion through tax changes and will have a net impact of $300 billion in deficit reduction according to the CBO. For the market, the stock buyback provision will be critical, but congress says it will generate $74 billion on its own. Still, this has been a key avenue for corporate spending in the last decade and Wallstreet will claim it forces inefficient maneuvers by corporations. The inflation reduction act will only make a very small impact on inflation over the next decade according to experts.

Finsum: Equity buyback taxes are very dumb, distorting how companies effectively spend money with excess revenue will only hurt the economy and the companies.

The U.S. had two consecutive quarters of negative growth meeting the technical requirements of a recession, and for the first time in over 40 years that coincided with very high inflation. Tasked with generating high returns in a stagflation environment investors are turning to an odd place, emerging markets. While some EM has suffered as a result of a stronger dollar and Fed tightening, pockets are promising to bring big returns in higher growth environments abroad. Countries relying on exports will have a difficult time, but countries like India, Malaysia, and Indonesia all have fairly robust domestic consumer demand and are quick-growing economies. The last country is an oddball but China has continued to deliver stimulus throughout the pandemic and may put itself in a good position to capture investor attention.

Finsum: Equities abroad are ultra-low, finding the right countries with domestic consumer support could be very profitable.

Equities have rallied, inflation is falling in the month of July, and global gas prices seem to be easing; investors can shake off the volatility concerns, right? Not just yet. Volatility experts Paul Britton founder of Capstone Investment Advisors told the FT that we aren’t through the weeds just yet as the corporate debt crisis looms at the end of 2022. Britton says there is a significant repricing as companies might struggle to pay off high corporate debt with rising interest rates. Capstone looks to profit on increasing volatility as they are a considerable hedge fund, but the VIX is still falling below its long-run moving average for the first time in four months. Fed experts like Mary Daly, president of the SF Fed branch, say the inflation battle hasn’t been won yet, signaling more rate hikes may be needed to bury inflation.

Finsum: Failing to consider the fact that inflation favors borrowers, real borrowing costs on corporate debt have decreased considerably.

Fixed income investors might feel lost in the current environment, but with yields starting to generate real income and prices ultra-low it might be the perfect buying opportunity. A new series of bond ETFs centered around treasuries was launched to capitalize on this unique time in the bond market. Slope Capital LLC and Genoa Asset Management LLC launched 10-year (UTEN.O), two-year (UTWO.O), and three-month (TBIL.O) dropped ETFs that will hold the most recent current Treasuries in the respective categories. Managers of the funds say this is well crafted precise tool for the fixed income investors that need a product like this. It gives new potential to bond investors in a precise way to tailor portfolios. There has been a flood into fixed income products as of late and funds are launching rapidly in response and will continue over the next half-decade.

Finsum: These tools can be utilized for investors wanting bond exposure, but not wanting to deal with the task of trading in the treasuries market and constantly updating