Conning ConnText Podcast Notes Economic Growth Continuing but at a Slower Pace; ESG Factors, Climate Policy and Demand Feeding Energy Market Volatility
October 22, 2021
Higher Energy Prices Likely to Continue Through Winter
HARTFORD, CT – October 22, 2021 — Leading global investment management firm Conning has posted its latest Conning ConnText quarterly podcast which observes that the economic rebound of 2021 is slowing but several indicators suggest it may continue into 2022. The podcast also discusses the factors driving the recent volatility in energy markets and notes that higher energy prices are likely to continue through the coming winter.
Rich Sega, Conning’s Global Chief Investment Strategist and host of the podcast, said that both the Fed and the International Monetary Fund have dialed back U.S. and global GDP growth targets but that business fixed investment has been robust and unemployment is falling. While much may be riding on the fate of the tax-and-spending plan currently being discussed in Washington, D.C., Sega remains optimistic. “We think there’s a good chance to continue our sustainable expansion that will support current market valuations, a testament to the strong condition of the pre-pandemic U.S. economy,” he said.
Energy prices may also have a say in the growth outlook and they have recently spiked across the globe. Marcus McGregor, a Director leading Conning’s energy-related research, explained the surge is due to several factors. Growth in ESG investing, government climate policies and a loss of tax subsidies and deductions have dampened investment interest and led to reduced production levels for mostly U.S. and European producers. However, demand has surged since the pandemic-induced slowdown of 2020 and lower energy supply is helping drive prices up.
These dynamics will likely lead to higher energy costs for consumers as winter approaches, McGregor said, and may also cause utilities to turn to relatively cheaper but more carbon-intensive energy sources like coal. ”Coal usage among utilities is up in 2021 versus last year,” he said.
ABOUT CONNING
Conning (www.conning.com) is a leading investment management firm with more than $209 billion in global assets under management as of September 30, 2021.* With a long history of serving the insurance industry, Conning supports institutional investors, including insurers and pension plans, with investment solutions, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America.
*As of September 30, 2021, represents the combined global assets under management for the affiliated firms under Conning Holdings Limited and Cathay Securities Investment Trust Co., Ltd. (“SITE”). SITE reports internally into Conning Asia Pacific Limited, but is a separate legal entity under Cathay Financial Holding Co., Ltd. which is the ultimate controlling parent of all Conning Holdings Limited controlled entities.
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