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Article | 02 September 2022 | Investments
From lows touched in mid-June, when the Nasdaq was 30% off its highs, the tech sector has enjoyed a rally. Why? In part it’s a natural rebound from the sharp falls of the first half, with investors keen to pick up their favourite stocks at bargain prices. But not all the big names have bounced. While Apple and Amazon have powered the rally, Meta Platforms (formerly Facebook) is still struggling to convince investors with its new virtual revenue model. And the price of lockdown star Zoom has tumbled back to earth, trading right back at pre-pandemic levels.
President Biden’s Inflation Reduction Act passed both Houses of Congress and was written into law. Worth more than $700 billion, the proposals are a scaled back version of the post-Covid Build Back Better programme, originally pitched at $4 trillion. While aiming to cut back inflationary forces, such as prescription drug pricing, the act also targets climate for the first time. Long-term tax credits will be offered to renewables developers. It’s an important win for Joe Biden ahead of the mid-term elections in November. But it has also been hailed as a ‘generational opportunity for clean energy’.
With hotspots across the US, Europe and China, the northern hemisphere is suffering widespread drought. The timing is bad. Agricultural production has been impacted, just as Ukrainian harvests have slumped. And the water level in major waterways, such as the Rhine and the Yangtze, has hit record lows. Shipping cannot pass, so supply chains are grinding to a halt. Rock bottom water levels are hampering hydro and nuclear power stations, just when imported energy supply is restricted. Inflation and growth worries are adding to concerns over changing weather patterns. China’s response? Demands for more coal to stimulate industrial output.