IN THIS ISSUE:
1. Market Update
2. Economy
3. Innovation
4. Green Energy
Market Update
The U.S. stock market continued its upward trajectory 3% this past week, with the S&P 500 gaining 3%, the Dow Jones Industrial Average (DJIA) rising 1.83%, and the NASDAQ Composite climbing 4.66%. On Friday, the S&P 500 jumped 0.5%, the NASDAQ climbed 0.7%, and the Dow added 300 points, up 0.5%, marking the fifth consecutive day of gains for the S&P 500 and NASDAQ. This rally was largely driven by a rebound in technology stocks. Nvidia took center stage this week, with shares soaring over 8%. CEO Jensen Huang’s remarks at the Goldman Sachs conference fueled optimism in tech stocks. “We have a lot of people on our shoulders, and everybody is counting on us. Demand is so great that delivery of our components, our technology, infrastructure, and software is emotional for people,” said Huang.
Market data: finance.google.com
Economy
Despite presidential debates and conversations about interest rate cuts, which likely caused market volatility in recent weeks, Wall Street sentiment remained positive. The reason is that The Federal Reserve is set to cut interest rates for the first time since 2020, with the decision next week expected to be either a 0.25% or 0.5% reduction in an attempt to prevent the economy from sliding into a recession due to high interest rates. With a current inflation rate of 2.5%, according to a recent Wednesday’s update, the decision is uncertain. The Fed has to decide on various metrics that define the economy’s health. In recent months, lower-income consumers have shown signs of financial stress, with rising credit card and auto loan delinquencies. While larger companies remain somewhat insulated from higher rates, smaller businesses feel the strain of increased interest expenses. That said, the unemployment rate has edged down but is still at a solid 4.2%, with layoffs remaining rare. Such a state of economic affairs brings unique responsibility on how much to cut: the decision will be made next week. Updates will follow.
Innovation
Many have seen how Apple announced its new iPhone 16 this past week in Cupertino. However, a unique innovation step in another product might have gone relatively unnoticed. This product is AirPods. The new feature will allow you to turn earphones into an over-the-counter medical device, which comes at a much lower price than conventional hearing aids. Even older AirPods 2 will get an update, thus allowing people with mild and moderate hearing loss to receive support without incurring traditional medical costs.
It is so often that the hearing aid is stigmatized, perhaps due to the unwillingness to wear artificial devices or visit medical professionals who frequently charge exorbitant prices. That said, Apple’s products are, to put it simply, cool. So many remember the “Think Different” campaign; many today want to use Apple products to stay trendy. Such a step in innovation, it seems, is not only a bold move to make a product better and generate revenues but maybe even a step of faith from the standpoint of social entrepreneurship and responsibility for societal needs.
Green Energy
According to the recent issue of The Economist, achieving a net-zero global electricity supply by 2050 may require a massive increase in grid-scale energy storage capacity. Battery capacity must expand significantly to support this transition. Innovations, such as sodium-ion batteries and decreasing costs driven by fierce market competition—particularly from China—are hastening the adoption of large-scale energy storage solutions. This is crucial to managing the intermittent supply from renewable energy sources like solar and wind. According to estimates by Bain, a consulting firm, the market for grid-scale storage is expected to surge from roughly $15 billion in 2023 to somewhere between $200 billion and $700 billion by 2030, potentially reaching $1 trillion to $3 trillion by 2040.
China currently leads the global battery production landscape, with companies like CATL and BYD at the forefront of developing grid-scale storage technologies. Government initiatives and extensive investments in research and development largely propel this leadership. However, the industry faces challenges like overcapacity, resulting in falling prices and market consolidation. This environment is also driving innovation in alternative technologies, including sodium-ion and nickel-hydrogen batteries, which are poised to meet the rising demand for renewable energy storage and support for data centers. The bottom line is the market may expand, and some of its areas may get too much competition; however, the expanding nature of the sector is bringing more opportunities for green entrepreneurs who are willing to explore or create new ways to drive innovation for the sake of achieving a green state of electricity supply. Yes, such a goal is challenging… yet necessary.
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Soka Business Review is created in collaboration between Bridges to Business and Soka Finance Society.
