Today is Tuesday, June 21, 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 examine the challenges facing various sectors on the path to net-zero carbon emissions. U.S. utility executives say their carbon-reduction goals are achievable, but only if promises of new technology and more federal support come true. Mining companies are off-loading coal assets to new owners, a strategy that critics worry will do little to curb overall global emissions. In the tech sector, chipmakers risk exacerbating supply constraints in their pursuit of environmental goals. Top global insurers are upping climate pledges, but gaps in their policies cast doubt on the effectiveness of these initiatives. Bank investors are willing to back lenders’ climate plans, although skepticism among campaigners and activist shareholders persists.
The S&P Global U.S. Manufacturing PMI, a closely watched indicator of manufacturing growth, hit a four-month low in May. Surveys from the Federal Reserve's regional branches have also reported slowing growth in the sector. The slowdown is partly due to the Fed's tightening of financial conditions. Supply chain issues, worsened by COVID-19 lockdowns in China, have also left manufacturers unable to obtain the raw materials needed to meet strong demand.
Chinese domestic lithium deals reached 16 billion Chinese yuan in the first five months of 2022, more than double the annual record set in 2021. Costs far higher than in overseas markets are failing to cool demand as Chinese companies rush to reduce geopolitical supply risks. The unprecedented M&A frenzy also came as lithium prices hit a new record in China amid a global shortage.
- In Focus: Path to Net-Zero
-
Path to net-zero: Utility execs insist 'we can'
Several utilities made new and bold pledges in recent months to ramp up reductions in greenhouse gas emissions. Still, all face challenges in their efforts to decarbonize by 2050.
—Read the full article from S&P Global Market Intelligence
Path to net-zero: Miners dump coal to slash emissions, appease investors
A handful of mining heavyweights discovered a shortcut to their goals is to spin off or sell the highest-emitting divisions, especially their coal mining operations.
—Read the full article from S&P Global Market Intelligence
Path to net-zero: US chipmakers balance growth vs. going green
Historically, semiconductors have not been the most environmentally friendly sector. But a $52 billion plan to boost U.S. chipmaking presents a chance to make the industry more sustainable.
—Read the full article from S&P Global Market Intelligence
Path to net-zero: Get-out clauses undermine insurers' climate targets
Several of the top global insurers are upping their efforts to cut carbon emissions from investment and underwriting portfolios, but gaps remain in their policies.
—Read the full article from S&P Global Market Intelligence
Path to net-zero: Banks weather storm, win buy-in on climate plans
Investors showed willingness to back banks' climate plans by rejecting shareholder proposals that would have required the companies to go further. The fight is not over as activists keep pushing.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Financials
-
More US banks are inking community benefits agreements after striking M&A deals
Banks may be entering community agreements to expedite regulatory approval, address issues that groups raise during the merger application process and contribute to overall Community Reinvestment Act compliance.
—Read the full article from S&P Global Market Intelligence
US banks shed exposure to high-volatility commercial real estate loans in Q1
The U.S. banking industry's aggregate balance of high-volatility commercial real estate loans in the first quarter dropped 12.4% sequentially and 8% year over year to $34.26 billion, according to an analysis by S&P Global Market Intelligence.
—Read the full article from S&P Global Market Intelligence
UK banks face mortgage arrears risk as rising inflation squeezes borrowers
Interest rates have risen swiftly in the wake of soaring inflation, and lenders are expected to see a sharp rise in mortgage arrears and possessions as a result.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Credit and Markets
-
Manufacturing momentum drags as interest rates rise, supply chains snag
Manufacturers continue to benefit from strong demand, but recession fears and renewed supply chain woes are weighing on the sector.
—Read the full article from S&P Global Market Intelligence
US corporate credit market shows signs of stabilization
The yield on U.S. corporate bonds has stabilized after months of rising as the prices of bonds fell. Some investors now see a buying opportunity in a market that may have fully priced in interest rate hikes and the risk of a recession.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Technology, Media and Telecommunications
-
Top tech stocks have lost $3 trillion in market cap in 2022
Six of the most highly valued stocks in history — Meta, Apple, Amazon, Netflix, Google and Microsoft — have shed a combined total of $3.328 trillion in market capital in 2022 as the year's sell-off progresses.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Private Equity
-
Venture capital-backed funding rounds worldwide plunge in May
The number of funding rounds with venture capital participation was down 16% year over year to 1,469 for the month, S&P Global Market Intelligence data shows.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Energy and Utilities
-
Freeport LNG shutdown in US could ripple through global gas markets
The natural gas export facility is expected to be closed for at least three weeks after a June 8 fire, amid surging demand for liquified natural gas. A prolonged outage would impact global gas markets and the U.S. supply-demand picture.
—Read the full article from S&P Global Market Intelligence
US solar panel imports plummeted ahead of White House trade intervention
The number of shipping containers carrying solar panels to U.S. ports in May was down 46% from a year earlier. On June 6, the Biden administration lifted the threat of new solar tariffs from a federal trade probe.
—Read the full article from S&P Global Market Intelligence
-
- Deep Dives: Metals and Mining
-
Geopolitical fears, soaring prices spur lithium M&A frenzy in China
Chinese miners and battery companies are rushing to secure domestic lithium supply, spending more than 16 billion Chinese yuan in the first five months of 2022 to hit a record high.
—Read the full article from S&P Global Market Intelligence
-
- The Week in M&A
-
Completed or not, Twitter deal would make records
Deal Tracker: Infotech megadeals support May M&A values amid lower volume
Asia-Pacific financial institutions M&A interest tracker
-
The Big Number
Trending
—Read more on S&P Global Market Intelligence and follow @BrianJScheid on Twitter
Seek & Prosper
Essential Intelligence from S&P Global — a powerful combination of data, technology, and expertise — helps you push past the expected and renders the status quo obsolete. Because a better, more prosperous future is yours for the seeking.
Additional Insights from S&P Global Market Intelligence
Check out other weekly newsletters highlighting our exclusive features and analysis:
ESG Insider: News and insights into environmental, social and governance developments driving change in business and investment decisions. Click here to subscribe.
Policy Intel: Explore exclusive news and research on policy and regulatory developments in the U.S. and around the globe. Click here to subscribe.
Private Equity Pulse: Need-to-know investments. Sharp insight. Private Equity Pulse offers our top picks of global private equity news stories. Click here to subscribe.
NEXT: Stay up to date on how technology is reshaping the future of industries across global markets. Click here to subscribe.
Written and compiled by Louis Bacani