Finimize - 🚗 Tesla went backward

What’s going on here?

September’s worse-than-expected UK retail sales cast an ominous shadow over the British economy.

What does this mean?

Brits scraped back on nice-to-haves in September, spending nearly 1% less on in-store and online shopping than the same time last year – worse than analysts expected. Now, part of that’s because the weather’s been milder than normal, so fall jackets haven’t been switched for winter coats just yet. But this trend of cutting back is also a symptom of the wider economy: wages are rising at a slower pace, a lot of folk are out of work, businesses are struggling, and Brits are low on confidence. That’s a problem. Central banks want to fight inflation without bringing down the economy as collateral damage, and this data suggests that delicate balance hasn’t quite been struck.

Why should I care?

For markets: It’s 50/50.

Inflation’s still holding its own, much to the dismay of central banks. And with the risk of triggering a recession still high, the Bank of England (BoE) is split ahead of its next meeting in November. Onlookers reckon the BoE could pause its 14-hike run, keeping rates at 5.25% – their highest point since 2008. But until the bank’s united in opinion, expectations are far from fact.

The bigger picture: We’re all in the dark.

Even the savviest analyst or most gifted psychic will have struggled to predict the economy’s direction over the last year. Many brushed off inflation as a fleeting phase, while doomsayers were surprised by a resilient global economy that, so far, has swerved an all-out recession. That even has folk questioning whether interest rate hikes are capable of taming the beast, with the boldest hikes failing to scratch the surface. Thing is, there’s a high chance they’re just taking longer to change consumer behavior: remember, businesses and everyday folk were padded with pandemic-era loans and savings before price rises crept in.

What’s going on here?

A Japanese think tank asserted that the gas industry needs a massive injection of cash, otherwise the world might run dry before 2050.

What does this mean?

The world’s on track to run out of gas in the coming decades unless the industry finds an additional $7 trillion, according to the Japanese Institute of Energy Economics. But that figure isn’t set in stone: it depends on how much gas we use, and that depends on how quickly green energy ramps up in the meantime. That $7 trillion figure is based on the globe cutting down on emissions by 56% before 2050 – and the International Energy Agency believes that’s possible, saying that gas demand will peak in the next few years. That’s no guarantee, though, and if that target isn’t reached, the sector will need to find almost $10 trillion to fund new plants and maintain existing ones in a bid to keep up with demand.

Why should I care?

For markets: A bit of dirt never hurts.

The jury’s still out on the future of fossil fuels. Major players like Chevron and Shell, for example, think gas will be a key energy source in the long run, even as dirtier coal takes a backseat. Despite projections like that, though, investment in the gas sector fell 58% between 2014 and 2020. And now that more money is pouring into renewable energy projects, it’ll only get harder for old-fashioned projects to attract wads of cash. Unless that changes, the price of gas could end up a whole lot more volatile than it has been before.

The bigger picture: Industry changes are nuclear.

Mind you, green energy isn’t the only theme attracting investors: energy security and nuclear energy projects are both grabbing attention right now. Nuclear energy company Orano just funneled nearly $2 billion into a uranium-enrichment plant in the south of France, spurred on by the prospect of western countries limiting their reliance on Russian gas.