Finimize - ⏱️ The clock is ticking

What’s going on here?

The US stock market switched back to settling trades the way it did a century ago – in a single day – in a move aimed to cut risks and crank up efficiency.

What does this mean?

For years, buyers and sellers of US stocks and other assets had two days to wrap up a deal. But, as of this week, that window has narrowed to just one day – a system called T+1. Financial industry groups had been pushing for the change for a while, arguing that the longer it takes to settle a trade, the higher the risk that something will go wrong. That could be either the seller or the buyer not holding up their end of the bargain.

Why should I care?

Zooming out: Time is money.

Today, the market is a massive, complex, global beast. And though it’s not Wall Street’s first rodeo, this change-up may be its toughest yet. See, market players now have less time to scrounge up cash or fix other hiccups. Non-US professional investors will probably struggle the most with the shorter timeframe, since they’ll need to get their hands on greenbacks more quickly to pay for American stocks. And missed trades can lead to penalty fees, losses, and bruised reputations.

The bigger picture: Ironing out the rough.

For most investors, the switch to T+1 should be pretty smooth. You’ll likely benefit from the reduced risk of quicker settlements – and cash from the stocks you sell will land in your accounts more speedily, allowing you to reinvest it faster. You’ll just have to have your cash on hand a bit sooner when you buy a stock. Most of the heavy lifting for this change will fall to the folks who handle all the back-end processing for these transactions. And fortunately, they’ve been gearing up for years to roll with this new cycle.

What’s going on here?

China spewed less CO2 in March, and now it looks like the world’s biggest polluter might be ahead of schedule in meeting its own environmental deadline.

What does this mean?

China’s emissions were 3% lower in March compared to a year ago, after 14 months of increased pollution, according to researchers at Carbon Brief. And a few key factors were driving the drop. First, wind and solar power met more of China’s growing electricity needs. Second, a slowdown in the property sector slashed emissions from the heavy-polluting steel and cement industries. And, third, rising EV use put the brakes on oil demand. This was China’s first emissions win since the pandemic – but it’s not likely to be the last. The researchers predict that China’s CO2 levels may have peaked in 2023 – well before the country’s 2030 deadline.

Why should I care?

The bigger picture: Most improved player.

China’s CO2 emissions account for a gut-punching one-third of the world’s total. So this decline is great news, especially with the planet having recently hit its 11th straight month of record temperatures. And, fortunately, there’s been good news elsewhere too: a study from Bloomberg New Energy Finance said that on a global basis, emissions may have peaked last year. They could even fall by 2.5% this year, helped by China's reduction in coal-fired electricity generation.

Zooming out: Fueling the fires.

But China’s green enthusiasm may not be strictly about the planet: if not for climate strides, its economy would be more lethargic. China’s clean energy sector accounted for 40% of its economic growth last year. Without that, the country’s economy would’ve grown by a measly 3% last year – well shy of the government’s 5% target and the 5.2% it actually delivered.