Three Things (4/18)

Green light for green markets

The SEC has approved the Green Investment Exchange (GIX), a new sustainable stock exchange slated to launch in 2026. GIX aims to list companies with strong environmental credentials, distinguishing itself through third-party verification of corporate climate performance. That added layer of accountability is meant to restore confidence in ESG investing at a time when skepticism is rising. While mainstream exchanges have struggled to separate genuine environmental leaders from greenwashers, GIX is positioning itself as a high-integrity alternative—offering investors a cleaner pipeline to companies aligned with climate goals.

The timing, however, is bold. ESG-focused investing is facing one of its most turbulent stretches in years. Nearly $5.7 billion was pulled from ESG ETFs last week—the biggest weekly outflow since early 2023—while $9 billion exited sustainable equity funds last month alone. Yet GIX’s backers argue the longer-term story is intact. The risks of climate change aren’t going away, and neither is the capital looking to hedge against them. Private markets may already be proving the point: more than $5 billion poured into U.S. climate-tech startups in Q1 2025, up nearly 65% from a year ago. In that context, GIX isn’t just launching a new exchange—it’s trying to reset the ESG narrative and meet growing climate-conscious capital with a higher standard of public market access.

The ads vanish

Temu and Shein—two of the most aggressive forces in ultra-discount retail—have abruptly scaled back their digital advertising in the U.S., signaling a strategic reset as trade headwinds mount. Temu slashed its March ad spend and downloads of its app on Apple’s App Store have plunged 62% in recent days, with Shein following suit. The pullback comes as policymakers move to close the de minimis loophole, which had allowed shipments under $800 to enter duty-free, and as fresh tariffs gain traction. The combination threatens the low-margin business models that allowed these platforms to flood U.S. social media feeds with cheap, fast-shipped goods.

The fallout is immediate. Temu and Shein have already announced price increases to offset the new costs, citing recent tariff changes as a direct driver. For brands built on razor-thin margins, hyperactive supply chains, and viral reach, the ad cuts signal more than temporary caution—they reveal a structural challenge to the fast fashion model itself. That model depends on lightning-fast production and duty-free shipping to push out ultra-low-cost styles at breakneck speed. Tariffs are now forcing these firms to choose between higher prices, lower marketing spend, or slimmer margins—none of which support the explosive growth they’ve enjoyed. What began as a trade policy shift is now reshaping digital commerce, making it harder for global fast-fashion giants to compete on price, speed, and scale.

Fear buying shifts into gear

Vehicle inventories across the U.S. are shrinking quickly as consumers scramble to purchase cars before newly imposed tariffs drive prices higher. The days’ supply of new vehicles—a measure of how long current stock would last at the current sales pace—fell to 70 days this month, a sharp 21-day drop from March and well beyond the typical 5 to 7-day monthly shift. Automakers and dealers have scrambled in response: some accelerated imports ahead of the 25% tariff on foreign vehicles that took effect April 3, while others, like Jaguar and Land Rover, held shipments at ports or paused them altogether. GM ramped up domestic production and canceled planned downtime at key facilities, while Ford and Stellantis rolled out “employee pricing” promotions to clear inventory. The results have been immediate—new vehicle sales are now running 22% ahead of last year’s seasonal pace and are up more than 8% year-to-date.

But the pace may not be sustainable. Analysts warn that once automakers sell through their pre-tariff-hike inventory, affordability could collapse, with increased production costs and price pressures potentially slashing U.S. and Canadian auto sales by up to 2 million vehicles annually. Nissan, meanwhile, is trying to “max out” U.S. production at its largest plant as it pivots hard toward domestic manufacturing. For now, the surge in sales may boost Q2 numbers—but it’s built on borrowed time. The tariff effect is pulling forward demand and raising structural costs in tandem, setting the stage for a colder back half of the year as price-sensitive buyers get priced out and dealers run lean on supply.