Finimize - ⚡️ Energy overdrive

What’s going on here?

The allure of Swiss luxury timepieces seems to be waning in the US, with April witnessing a slide in exports, according to recent industry data.

What does this mean?

Covid lockdowns left Americans with swollen wallets and a yearning for indulgence – and luxury wristwatches seemed to fit the bill just fine. The ensuing splurge on high-end timepieces vaulted the US to the top of the Swiss watch league, overtaking high-rolling China in 2021. But the hands of time took an unexpected turn this April, with Swiss watch exports to the US dialing back by 4.9%. That marked the first slowdown in over two years, sure – but it’s not all downbeat for Swiss watchmakers: overall exports rose by 6.8% in April, with shipments to China more than doubling compared to last year.

Why should I care?

The bigger picture: Worth watching.

Luxury spending usually manages to hold its ground amidst economic turbulence, and that’s mainly because high-net-worth individuals – who dominate demand for pricy stuff – are less troubled by economic downturns. But if this slight hiccup in US luxury watch spending morphs into a trend, it might signal a rough road ahead for the broader US economy. After all, if the uber-wealthy are nervous enough to start tightening their purse strings, it could signal some seriously stormy weather for the average Joe.

For markets: Scarcity factor.

Investors have relied on luxury spending’s steady growth for years. But the sector’s an exclusive club, dominated by European behemoths and a few acclaimed boutique players. And members of that chic VIP list have stock prices that mirror their exorbitant offerings. This mightn’t worry investors who are playing the long game, provided demand – supported by things like strong stock markets – stands firm. But beware: in the nearer term, a luxury spending dip could leave those high valuations looking as inflated as a Birkin bag’s price tag.

What’s going on here?

The International Energy Agency (IEA) predicted that this year will be a bright one for renewable energy.

What does this mean?

Pandemic-induced supply chain headaches put the brakes on renewables for a while – but now it’s full steam ahead once again, thanks to a little nudge from high oil and gas prices and some serious energy security concerns. That means the IEA thinks global renewable energy capacity will swell by a third in 2023: that amounts to the biggest yearly boost we’ve ever seen, equivalent to the power capacity of Germany and Spain combined. And while this is a concerted worldwide effort, China will keep leading the pack – driven in part by its promotion of massive solar projects.

Why should I care?

Zooming in: Working but winded.

If the world keeps up this pace, we could have enough solar manufacturing capacity to meet the IEA’s net-zero emissions scenario come 2050. But it won’t be a cakewalk either: after all, infrastructure is lagging at the moment, meaning that government support will be crucial to keep things on track. Plus, investors are paying a lot of attention to profitability right now, and that’s got companies like Shell re-evaluating underperforming green assets – even ones that might have potential in the long run. The bottom line, then: we’re still not shifting to renewables fast enough, especially with scientists warning that the Earth’s past certain safe limits for human health.

The bigger picture: Equalizing energy.

Trade and geopolitics could change drastically in a world powered mainly by renewables. See, renewable energy sources like solar and wind are more evenly spread across the globe than oil and gas – and that could leave countries sitting atop black gold with less room to throw their weight around. In theory, then, more of our energy would be produced closer to home, balancing power and reducing the need to ship nations’ resources across the world.