In this edition of Insight Weekly, we take a look at potential outcomes of the U.S. midterm elections. Based on strong ties between most of the Democrats in Congress and strict generic congressional party polls, IHS Markit expects the Democrats to hold the Senate, and Republicans to take the House of Representatives. The next most likely scenario would see the Democrats emerge with a majority in both the congressional chambers. The party is expected to benefit from the U.S. Supreme Court's decision to overturn federal abortion rights and a favorable Senate map. Results of key individual races and control of Congress will shape the direction of national climate and energy legislation over the next two years.
Surging interest rates and reducing liquidity in financial markets are driving borrowing costs higher around the world. Due to weakening investors interest in the global sovereign bonds, the benchmark U.S. 10-year Treasury bond yielded 3.89% as of Oct. 7, up from 1.63% in the beginning of the year.
The U.S. commercial real estate market is expecting to deteriorate due to increasing demand from employees to work remotely. Average office occupancy across 10 major U.S. cities was at about 47% at the end of September, according to Kastle Systems, more than 50% below the prepandemic levels, or up from 36% in 2021.
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- In Focus: US Midterm Election Scenarios
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US midterm election scenarios: Divided Congress is most likely outcome
In the U.S. midterm elections on Nov. 8, we expect the most likely outcome will be that Democrats retain the Senate, and Republicans win the House of Representatives.
—Read more on ihsmarkit.com.
US Midterms 2022: Energy policy battles play out in key races for Congress
The outcome of individual races in the House and Senate will decide who sits on and helps lead key committees and whether champions of recent energy policies remain in Congress.
—Read more on S&P Global Market Intelligence.
Calif. sports betting ballot issues top Senate races in midterm spending
Kantar Media estimates some $400 million has already been spent in support or opposition to a pair of sports betting propositions in California, topping spending on any candidate race in the 2022 midterm cycle.
—Read more on S&P Global Market Intelligence.
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- Deep Dives: Financials
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Bank watchdog's credit card late fee project could hit small institutions hard
Experts anticipate community banks and credit unions will be most impacted by the Consumer Financial Protection Bureau's impending change to credit card late fees, although it is unclear exactly what the agency will change.
—Read more on S&P Global Market Intelligence.
Proposed FDIC rule may discourage largest banks from offering loan modifications
The Federal Deposit Insurance Corp. proposed that banks with $10 billion or more in assets begin using "modifications to borrowers experiencing financial difficulty" in calculating what they owe to the Deposit Insurance Fund.
—Read more on S&P Global Market Intelligence.
Indian bank stocks shine in Q3 on strong metrics, growth prospects
Conversely, mainland China banks took a majority of slots on the list of 15 Asia-Pacific bank stocks with the lowest total returns in the third quarter, according to data compiled by S&P Global Market Intelligence.
—Read more on S&P Global Market Intelligence.
Turkish lenders lead European bank stocks in Q3
Stocks of Turkish banks rose steadily in the two months to mid-September but have since plummeted on the back of soaring inflation and interest rate cuts.
—Read more on S&P Global Market Intelligence .
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- Deep Dives: Insurance
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Allstate, Progressive shares outperform market, peers YTD despite turmoil
The outlook for property and casualty insurers remains generally positive even after Hurricane Ian, given the industry's ability to weather one or two major events each year.
—Read more on S&P Global Market Intelligence .
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- Deep Dives: Real Estate
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8 US REITs, 1 Canadian REIT increase dividend payments in September
The dividend increases announced in September bring the year-to-date total to 83 for U.S. real estate investment trusts and nine for REITs based in Canada.
—Read more on S&P Global Market Intelligence.
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- Deep Dives: Private Equity
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Global venture capital investments drop YOY in September
The number of funding rounds with venture capital participation declined 30.3% to 1,438 rounds, from 2,063 in September 2021, according to S&P Global Market Intelligence data.
—Read more on S&P Global Market Intelligence.
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- Deep Dives: Credit and Markets
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Brazil's first-round election results increase risk of gridlock in Congress, posing hurdles to fiscal consolidation
In the general elections in Brazil, former President Luiz Inácio Lula da Silva of the leftist Workers' Party and incumbent far-right President Jair Bolsonaro of the Liberal Party came first and second, respectively, in the first round of voting on Oct. 2.
—Read more on ihsmarkit.com.
Global borrowing costs surge on rising rates, reduced liquidity
With central banks continuing to hike interest rates to fend off runaway inflation, yields on government bonds look set to rise further, raising borrowing costs for governments and companies alike.
—Read more on S&P Global Market Intelligence.
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- Deep Dives: Energy and Utilities
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RRA Research: Mapping communities eligible for additional Inflation Reduction Act incentives
More than 2,800 U.S. census tracts and over 100 metropolitan and nonmetropolitan statistical areas will qualify as energy communities per an S&P Global Commodity Insights analysis of the Inflation Reduction Act's qualifying criteria.
—Read more on S&P Global Market Intelligence.
Britain contrasts European neighbors with 'bizarre' energy-saving messaging
The British government's hesitancy to urge the public to save energy juxtaposes with the approach of other European nations and means the country is walking "unprepared" into the winter, industry observers said.
—Read more on S&P Global Market Intelligence.
Midstream sector's spending plans, LNG exposure in spotlight for Q3 earnings
Most of the 12 major North American midstream companies covered by S&P Global Market Intelligence should record year-over-year gains in adjusted EBITDA, and all should report increased revenue, according to analyst consensus.
—Read more on S&P Global Market Intelligence.
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- Deep Dives: Technology, Media and Telecommunications
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451 Research: Broadcom extends its network chips to 800 Gbps
The Tomahawk 5 is intended to help Broadcom maintain its market position in merchant Ethernet chips and is well-suited for hyperscale datacenters and public clouds. But Broadcom faces its strongest competition in a long time from Nvidia and Marvell.
—Read more on S&P Global Market Intelligence
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- Deep Dives: Metals and Mining
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Metals And Mining Research: State of the Market – June quarter 2022
Despite most key sector indicators, such as market prices, fundraising and exploration, beginning the quarter at or near historical highs, macroeconomic uncertainty precipitated declining trends.
—Read more on S&P Global Market Intelligence
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- Deep Dives: Supply Chain
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Solar supply chain braces for reshuffle as EU embarks on forced labor ban
The EU has committed to banning products made by using forced labor, and in the energy sector this heightens focus on the human rights record of solar supply chains.
—Read more on S&P Global Market Intelligence.
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- Deep Dives: ESG
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La. treasury divests from BlackRock over ESG but spares big pension funds
The decision to remove BlackRock from the state's treasury fund is part of a backlash from Republican-led states opposed to policies they say will hurt their energy industries.
—Read more on S&P Global Market Intelligence.
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- The Week in M&A
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Deal Profile: Illinois-based Fisher Bancorp to acquire in-state peer Butler Point
Read on S&P Global Market Intelligence.
Media, telecom M&A advisory ranks unchanged as Q3'22 dealmaking slows
Read on S&P Global Market Intelligence.
M&A Replay: Cosan's $4B Vale stake buy tops metals, mining M&A for week ended Oct. 7
Read on S&P Global Market Intelligence.
J.P. Morgan takes lead by number of utility M&A deals through Q3'22
Read on S&P Global Market Intelligence.
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The Big Number
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—Read more on S&P Global Market Intelligence and follow @Brian Scheid on Twitter.
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