Global Climate Opportunities 1Q24 Commentary

April 30, 2024

Investor Letters

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In our last quarterly commentary, we cautioned that “we should continue to expect rapid changes to consensus opinions on the direction of interest rates, inflation, and equity markets, which is congruent with the actions of a “data-dependent” U.S. Federal Reserve.”

The ensuing economic data in 1Q replaced most predictions for a hard U.S. led global recession with the general consensus of a soft-landing. Investors made a complete U-turn in expectations due to stickier-than-expected inflation data and an escalation of the Middle East conflict. The consensus going into 2024 of 150 bps of US Fed rate cuts in 2024 and a further 75bps-100bps cut in 2025 ended the quarter with current expectations of less than 75 bps in 2024 and high uncertainty for 2025. The US 10-Year Treasury Bond Yield was volatile, going from a low of 3.88% to a high of 4.31% in less than two weeks. The US Dollar strengthened versus most developed global currencies, and oil prices went from near $70/barrel to $83 by end the quarter. Even with this backdrop, broad global equity markets rallied sharply, led by US mega-cap technology stocks.

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Global Climate Opportunities 1Q24 Commentary

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Global Climate Opportunities 1Q24 Commentary

Global Climate Opportunities 1Q24 Commentary

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