Today is Tuesday, April 19, 2022, and here’s your weekly selection of essential intelligence on financial markets and the global economy from S&P Global Market Intelligence. Subscribe to be notified of each new Insight Weekly.
In this edition, we put the spotlight on U.S. banks as earnings season kicks into high gear. Only four of the 16 publicly traded banks with more than $100 billion of assets are forecast to post sequential increases in EPS for the first quarter of 2022. Analysts expect earnings reports to tackle themes including net interest income trends, revenue headwinds, loan demand and liquidity deployment. Investors will also be watching for signals about the potential impact of macroeconomic concerns and shocks like the war in Ukraine.
Investment-grade-rated nonfinancial companies in the U.S. have lowered their debt-to-equity ratios — a closely watched measurement of corporate leverage — for seven successive quarters, according to S&P Global Market Intelligence data. Companies have significantly boosted their balance sheets as the value of equity grew more quickly than debt.
The Brazilian real, Peruvian sol and Chilean peso saw the greatest improvements in a basket of emerging market currencies across the globe during the first quarter, data collected by S&P Global Market Intelligence showed. Higher international commodity prices amid the Ukraine crisis and interest rates hikes in Latin American economies have helped strengthen their currencies against the U.S. dollar.
- In Focus: US Bank Earnings
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Inflation puts dent in M&A after white-hot 2021
M&A deals in North America fell 16.7% from February 2021 to February 2022, according to the latest S&P Global Market Intelligence data.
—Read the full article from S&P Global Market Intelligence
Technology M&A values dive in Q1 even as volumes hit record
The prospect of higher interest rates hit equity markets hard in the first quarter, translating into a dip in M&A valuations. But deal volumes remained at a record high, and analysts expect acquirers to buy into the dip.
—Read the full article from S&P Global Market Intelligence
M&A volume dips YOY across insurance industry in Q1
Berkshire Hathaway's planned purchase of Alleghany was by far the largest insurance deal announced in the first quarter.
—Read the full article from S&P Global Market Intelligence
Steady M&A continues to deepen bank-fintech convergence
Banks are snapping up talent and digital capabilities from fintech acquisitions and partnerships, as the line between traditional definitions of banks and fintechs continues to blur.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Credit and Markets
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US companies continue deleveraging trend through end of 2021
The highly cash-generative information technology sector has the lowest leverage of the 10 nonfinancial sectors tracked by S&P Global Market Intelligence.
—Read the full article from S&P Global Market Intelligence
World's strongest Q1 currency gains seen in LatAm as commodity prices rise
Currencies are gaining steam even as Latin American economies face political uncertainty, with Brazil and Colombia preparing for presidential elections, Peru in political turmoil, and Chile working to rewrite the constitution.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Technology, Media, and Telecommunications
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Microsoft's burgeoning cloud business draws EU scrutiny
Analysts say while Microsoft has grown its business by leaps and bounds in Europe, growth in multicloud strategies leaves plenty of room for competitors big and small.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Financials
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Crossing $10B in total assets a rare sight for US credit unions
Sitting above $10 billion in total assets is an exclusive club for credit unions, with only 19 out of 5,019 operating credit unions in the U.S. above the critical threshold.
—Read the full article from S&P Global Market Intelligence
US banks' 2021 dividend payout ratios lower than pre-pandemic levels
In 2021, publicly traded banks in the U.S. distributed an aggregate of $54.32 billion in dividends to their shareholders.
—Read the full article from S&P Global Market Intelligence
CEO pay rebounds at big US banks in 2021
The CEOs at Morgan Stanley and Goldman Sachs both made $35.0 million last year, edging out JPMorgan's Jamie Dimon at $34.5 million.
—Read the full article from S&P Global Market Intelligence
Hong Kong bankers high in demand as city fights to keep finance hub status
Banks in Hong Kong face an acute talent shortage as the city continues to impose some of the strictest travel restrictions in the world to control the COVID-19 pandemic.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Insurance
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Insurers' $15B Russia aviation puzzle will take years to solve
The industry expects disputes over coverage triggers and which types of cover will apply to the hundreds of foreign-owned jets stranded in Russia as a result of the Ukraine war.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Fintech
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Insurtechs battling persistent losses, slumping stocks bring in seasoned execs
Insurance technology companies are discovering that they need to have sophisticated balance sheet management and solid underwriting practices, and are turning to industry veterans for help.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Metals and Mining
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Graphite emissions fuel search for solutions along EV supply chain
Heavy reliance on coal and oil to make graphite is driving up the carbon emissions associated with making lithium-ion batteries. Downstream companies are starting to scour the globe for low-carbon sources to keep emissions at bay.
—Read the full article from S&P Global Market Intelligence
Gold industry groups aim to 'squeeze out nefarious practices' with tracking tech
New technology and programs coming out of the gold sector will enable gold investors and consumers to track and verify responsible and ethical production from what has been a relatively high-polluting industry in the past.
—Read the full article from S&P Global Market Intelligence
'Hold onto your wallets': Low zinc supply hints at market shocks ahead
Supply scarcity has raised zinc prices and catalyzed massive stock drawdowns, potentially exposing the London Metal Exchange to another bout of volatility.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Energy and Utilities
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Outlook 2022: Renewable resources make up most US planned capacity additions
An analysis of S&P Global Market Intelligence data shows that the U.S. is expected to add 87,535 MW of generation and storage in 2022, while 9,257 MW of capacity is set to be retired.
—Read the full article from S&P Global Market Intelligence
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- This Week in M&A
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Kaseya's $6.2B play for Datto to expand managed service providers offerings
SailPoint, Tufin go private in run of cybersecurity acquisitions by PE firms
$1B+ US asset management deal space off to strong start in 2022
Mortgage banking M&A activity increases in Q1 after deal drought
Deal Tracker: Media, telecom M&A activity falls 37.6% YOY in March
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Navigating Risks and New Realities
Geopolitical tensions are at an unprecedented high and markets are noticeably stressed. Explore the data and analysis you need to stay ahead of evolving conditions with insights on credit risk, supply chain, maritime & trade, economic & country risk, and more.
Written and compiled by Louis Bacani