🤨 AI cozies up... to coal

Eurozone inflation was higher than expectations | Ditching coal is proving harder than expected | [Finimize](   TOGETHER WITH     Hi {NAME}, here's what you need to know for June 1st in 3:09 minutes.   🎧 The Federal Reserve’s 2% inflation target is taken for granted by most of the world. But listen into [our latest podcast](, and find out why Fidelity Investments’ Jurrien Timmer believes that "sure force" is about to change. [Listen here]( Today's big stories - Eurozone inflation came in hotter than expected in May - Three investing ideas stood out this earnings season – [Read Now]( - AI’s power needs are throwing a wrench in the US’s plan to ditch coal Hot Under The Collar [Hot Under The Collar] What’s going on here? Data out on Friday [showed]( consumer prices across the eurozone perked up in May, and you can bet the European Central Bank (ECB) didn’t love the timing of that. What does this mean? This latest report came in days before the ECB was expected to cut its key interest rate from the current, historic high. See, like most of the world’s central banks, the ECB has been battling against hot inflation with its biggest bazooka: high interest rates. And that’s proved fairly effective. Consumer prices rose by just 2.6% in May from the year before – only two ticks higher than the rises in March and April, and not miles away from the central bank’s 2% target. But now the ECB is looking to put that weaponry away: higher interest rates do a good job of holding down price increases, but they also weigh down economies in the process. Why should I care? Zooming in: Kindest cuts. The past two years haven’t been easy for the eurozone, with high inflation and expensive borrowing rates making consumers and businesses reluctant to spend. Just look at the annual pace of economic growth across the bloc: it came in at just 0.4% in the latest quarter, and the forecasts for the rest of the year aren’t much rosier. So a rate cut from the ECB – its first since 2019 – would likely be welcome news for the region’s economy and its stock market. The bigger picture: Not running with scissors. The ECB might have hiked rates aggressively, but it’s not likely to lower them at the same tempo. The central bank will want to take a slow-and-steady approach, not least because of the risk of reigniting that old inflation foe. After all, if Europe cuts its rates and the US Federal Reserve doesn’t, that’ll weaken the euro and strengthen the dollar – making European imports more expensive and pushing consumer prices higher all over again. You might also like: [Seven’s nice, but Europe’s got a “Magnificent” Eleven.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Hot Under The Collar&utm_campaign=daily-global-01-06-2024&utm_source=email) Analyst Take Capital Group Sees Three Investing Ideas Rising Above The Rest [Capital Group Sees Three Investing Ideas Rising Above The Rest]( By Theodora Lee Joseph, CFA, Analyst There were plenty of bright spots to be found in the latest batch of quarterly updates. But Capital Group, one of the world’s oldest and biggest investing houses, noticed three portfolio ideas that seemed to outshine the rest. So if you’re on the hunt for some new winners and want to shake things up beyond the usual S&P 500 ETF, here are the picks they’re buzzing about. That’s today’s Insight: [three opportunities stood out this earnings season](. [Read or listen to the Insight here]( SPONSORED BY IG Your cheat sheet for choosing a trading platform There are nearly as many trading platforms as there are stocks nowadays. So it’s tough to weed through them all – but if you want to find a platform with [the sharpest tools](, the [best benefits](, and the [fewest hidden fees or fine print](, you’ll need to plow through one by one. Or not. [Our guide]( to finding the right trading platform details the components that you’ll want to look for, the factors that can set you up for an optimum experience, and any red flags to be aware of. Think of it as your [cheat sheet for vetting platforms](, so you can streamline your search. Or if you want an even easier route, we included [an overview of IG’s platform]( – you might just find it sticks. [Read The Guide]( When you support our sponsors, you support us. Thanks for that. If you want your brand featured here, [get in touch.]( The Back Burner [The Back Burner] What’s going on here? AI’s eye-watering power needs are forcing the US to cling to the fuel of yesteryear: coal. What does this mean? Retirement plans for the country’s aging coal-fired power plants have hit a wrinkle, with concerns about grid reliability and growing electricity demand forcing operators to keep the powerhouses burning. Now, just 54 gigawatts of America’s coal-powered capacity are expected to go offline by the decade’s end – a 40% decrease from last year’s projections. And the strain is only going to get worse: AI bots like ChatGPT use nearly ten times as much electricity to fetch an answer compared to a simple Google search. Why should I care? Zooming out: Pipe dreams. All of that’s a growing headache for the US government, which is aiming for a carbon-free power sector by 2035. Renewable projects are already facing years-long delays due to equipment shortages, infrastructure issues, and regulatory hurdles for grid connections. And a debate over fossil fuels is playing out too, with OPEC and the International Energy Agency (IEA) butting heads. The group of oil-producing countries thinks oil use will continue to rise over the next 20 years, while the IEA predicts it will peak by 2030. And if OPEC is right, the fossil fuel industry will need more investment to keep supply flowing. The bigger picture: On the bench. Don’t mistake coal’s retirement delay for a comeback: its use is still set to decline by 4% this year alone. And, sure, coal’s dimmer future might be good news for companies producing cleaner fuels like natural gas or nuclear, but they’ll have to decide which side of the debate they’re on. If they stand with OPEC, they’ll need to carefully balance the green transition with more investments into fossil fuels just to keep the US alive in the AI race. You might also like: [Can nuclear energy light up your portfolio?]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=The Back Burner&utm_campaign=daily-global-01-06-2024&utm_source=email) 💬 Quote of the day "Try to be a rainbow in someone's cloud." – Maya Angelou (an American poet, memoirist, and civil rights activist) [Tweet this]( 🤝 Tom and Jerry, Woody and Buzz Lightyear, Butch Cassidy and the Sundance Kid. You're a stellar fintech brand looking to get your name out there, and [we're a newsletter]( with hundreds of thousands of brainy, switched-on readers. Let's become the next picture-perfect duo: [Talk to the team](. [Get Your Name Out There]( 🎯 On Our Radar 1. Green fingers. A step-by-step guide of how to create your very own [garden from scratch.]( 2. You can build on NFT land just like regular land. Here's what to consider when you’re [scouting for land in the metaverse](.* 3. A walk in the park. Here’s an account of the grand endeavor of hiking the [length of the Grand Canyon.]( 4. Not all those who wander are lost. 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