Today is Tuesday, July 12, 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 take a close look at U.S. stock performance at the half-year mark. The S&P 500 fell 20.6% during the first six months of 2022, its worst start to a year since 1970. Energy stocks were the market's lone bright spot as oil prices rallied, though the sector posted steep losses in June. Utility stocks also fared better than most, and experts foresee substantial price gains in a looming recession due to the industry's stable earnings and dividend growth, and its decreasing sensitivity to interest rates. For the broader market, equity analysts believe that the path forward depends on the Federal Reserve's ability to tame inflation and the severity of a potential economic downturn.
Most of the 20 largest European banks suffered market cap declines in the first half, a period marked by mounting recession fears amid Russia's invasion of Ukraine. Sberbank of Russia, whose operations have collapsed under the weight of crushing international sanctions, saw its market cap fall by more than half. CaixaBank posted the biggest gain in market value as the Spanish bank stands to generate more revenues amid rising interest rates due to its loan book composition.
Initial public offering activity in the technology, media and telecommunications sector has dropped off sharply from its 2021 peak as public markets lose their appeal to companies looking for liquidity in 2022. S&P Global Market Intelligence counted 12 sector IPOs that were completed in the first half, compared to 52 in the year-ago period. IPOs that listed during the boom of 2021 and into 2022 have also struggled to provide returns from their IPO price.
- In Focus: US Stock Market
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US stocks suffer worst first half in 52 years
The S&P 500 fell 20.6% through the first six months of 2022 as institutional investors pulled $183.2 billion from U.S. equity markets, S&P Global Market Intelligence data shows.
—Read the full article from S&P Global Market Intelligence
Energy stocks plummet in June as recession fears drag oil prices
A big factor in the sell-off was the steep decline in crude oil futures during the month as markets react to fears of recession, aggravated by supply threats linked with geopolitical tensions.
—Read the full article from S&P Global Market Intelligence
Analysts see stable utility sector stocks poised to ride out potential recession
The U.S. utility industry could even see stock prices rise during a potential economic downturn, despite the downside risk to holding companies facing climate, regulatory, earnings and load growth issues, analysts said.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Financials
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Eyeing rate hikes, US banks wary of growing, extending bond portfolios
Banks were far more cautious about investing cash in the bond market in the first quarter of 2022 amid Federal Reserve rate hikes.
—Read the full article from S&P Global Market Intelligence
Top 20 European banks by market cap, Q2'22
The market capitalization of Spain's CaixaBank rose more than any other large European bank in the first half of the year, according to S&P Global Market Intelligence data.
—Read the full article from S&P Global Market Intelligence
China rural banks face growing stress on credit quality as economy slows
Rural commercial banks have the largest exposure to small business loans, the highest nonperforming loan ratios and the smallest buffers against potential bad loans compared with other lenders in China.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Real Estate
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US housing market: House price growth decelerates in April
Macroeconomic headwinds might not be able to support "extraordinary home price growth" for long, according to S&P Dow Jones Indices Managing Director Craig Lazzara.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Credit and Markets
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Large M&A remained strong in H1'22 despite slow June
There were 23 deals worth $10 billion or more announced in the first half, with total transaction value of $560.59 billion.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Energy and Utilities
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US generating capacity additions outpaced by retirements in May
Units totaling 2,393 MW retired in May, surpassing U.S. capacity additions of 1,818 MW.
—Read the full article from S&P Global Market Intelligence
Geography matters: Hydrogen hub proposals spring up across North America
The U.S. Energy Department's $8 billion commitment for at least four regional clean hydrogen hubs has sparked more than a dozen proposals by natural gas producers and clean energy advocates.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Technology, Media and Telecommunications
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Tech, media, telecom IPOs crater in H1 amid bearish sentiment
IPOs in the technology, media and telecommunications industry came to a near standstill in the first half of 2022 after a boom year in 2021.
—Read the full article from S&P Global Market Intelligence
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- The Week in M&A
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Oil majors Exxon, Equinor divest some North American assets
South Korean zinc deal leads metals, mining M&A for week ended July 1
Kansas-based Landmark Bancorp to acquire in-state peer Freedom Bancshares
Pinnacle Bancorp unit to acquire San Antonio-based Crockett National Bank
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Written and compiled by Louis Bacani