Climate goals face headwinds; semiconductor revenues soar; company debt retreats
In this edition of?Insight Weekly, we take a close look at the challenges to achieving net-zero emissions in the energy industry. The fossil fuel sector is on track to miss 2050 net-zero targets by a wide margin, according to an analysis of data from S&P Global's Sustainable1 unit. The 30 largest oil and gas companies in Europe and North America collectively have an emissions trajectory consistent with a 5-degree C rise in global temperatures by 2100. While most large US power companies are gaining ground on decarbonization, progress was uneven in 2023 and new challenges lie ahead, a survey by S&P Global Commodity Insights showed. Extreme weather, rapidly rising energy demand, grid interconnection delays and opposing state policies can hamper progress for the most ambitious of power companies. In Europe, utilities' renewables ambitions could outpace what local cleantech factories can produce while at the same time, the EU works to reduce its reliance on China for renewables technology. The competing interests could become a defining dilemma on the region's path to net-zero carbon emissions.
Large semiconductor company revenues surged to a record high in the second quarter, and further growth remains on the horizon. Revenues for companies in the S&P Semiconductors Select Industry Index approached the $100 billion mark during the quarter, according to data from S&P Global Market Intelligence. While the lion's share of the increase was largely driven by demand for NVIDIA's AI chips, the second quarter showed signs of modest recovery in other semiconductor end markets, such as industrial applications and the internet of things.
The total debt for nonfinancial US companies rated investment-grade by S&P Global Ratings retreated from a record high set in the first quarter. The combined debt among investment-grade and non-investment-grade companies dropped to $8.432 trillion in the second quarter, from $8.517 trillion a quarter earlier. Investment-grade companies trimmed debt by about 0.9% to $6.610 trillion, while companies rated below BBB- by S&P Global Ratings cut debt by about 1.2% to $1.822 trillion, according to S&P Global Market Intelligence data.
Path to Net-Zero in Focus
Path to net-zero: Emissions from oil and gas industry push 5-degree C rise
Carbon emissions from a large part of the industry are aligned with a significant spike in global temperatures by 2100, according to data analyzed by S&P Global.
—Read more on S&P Global Market Intelligence .
Path to net-zero: US utilities face new headwinds on decarbonization journey
US power companies are making progress toward achieving their net-zero goals. However, rising power demand, extreme weather events and political pushback forced some companies in 2023 to retreat while others slowed their emissions reduction pace.
—Read more on S&P Global Market Intelligence .
Path to net-zero: Europe faces trade-offs in cleantech manufacturing push
Low-cost equipment has driven much of Europe's progress toward net-zero, but a reshoring effort is becoming a defining dilemma as 2030 goals approach.
—Read more on S&P Global Market Intelligence .
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Deep Dives
In-depth features looking at the impact of major news developments in key industries.
Financials
Gulf banks to start new M&A wave in strategy shift
The region's banks are exploring opportunities to merge, divest foreign subsidiaries or acquire new ones, with Kuwait a particular hot spot, banking risk analysts at S&P Global Market Intelligence said.
—Read more on S&P Global Market Intelligence .
Busy 2024 pushes Raymond James into ranks of top bank M&A advisers
Raymond James advised on 12 US bank M&A transactions in 2024 as of Sept. 10, keeping pace with its advising in 2021, a far busier year for dealmaking.
—Read more on S&P Global Market Intelligence .
Fed cuts set to unwind damage to US banks' bond holdings
Tumbling medium-term interest rates could deliver major boosts to banks' tangible common equity.
—Read more on S&P Global Market Intelligence .
Big investment banks set for 30% rise in advisory, underwriting revenues in 2024
After a strong start to the year, business is expected to remain robust in the second half amid a rebound in M&A and capital markets activity, sector observers said.
—Read more on S&P Global Market Intelligence .
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Insurance
Financials Research: US life and annuity market to experience top-line extremes, report projects
The newly released 2024 US Life and Annuity Market Report calls for another year of outsized growth, fueled by record sales of individual annuities, followed by much more restrained expansion thereafter.
—Read more on S&P Capital IQ Pro .
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Fintech
Fintechs mull bank charters as regulatory pressure on partnerships ramps up
Recent turbulence in banking-as-a-service has prompted fintechs to explore obtaining bank charters and reduce their reliance on bank partners. UK small business lender OakNorth is searching for a target in the US, but it could go the de novo route.
—Read more on S&P Global Market Intelligence .
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Real Estate
9 US REITs, 2 Canadian REITs announce dividend hikes in August
The August numbers bring the total for real estate investment trusts that declared dividend hikes in the first eight months of 2024 to 59 US companies and six Canada-based entities.
—Read more on S&P Global Market Intelligence .
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Private Equity
Private equity targets battery energy storage, driven largely by EVs, renewables
The value of private equity and venture capital investments in battery energy storage system, energy management and energy storage reached $17.86 billion by Aug. 20, already surpassing last year's total of $16.17 billion.
—Read more on S&P Global Market Intelligence .
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Credit and Markets
Total debt retreats from record high for rated US companies
A drop in debt among information technology companies offset increases in most other sectors, bringing total leverage down for investment-grade companies.
—Read more on S&P Global Market Intelligence .
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Energy and Utilities
RRA Research: Southwest Gas files multiyear rate case with Calif. utilities commission
The rate application requests rate increases across its three service territories from 2026 through 2030.
—Read more on S&P Global Market Intelligence .
US, Canadian utilities raise $8.31B in August; YTD total tops $100B
The year-to-date total is 2.68% higher than the $99.10 billion raised in the same period in 2023.
—Read more on S&P Global Market Intelligence .
US statehouse elections offer no easy paths to prohibiting gas bans
Gubernatorial and state legislative elections benefited building decarbonization advocates more than gas ban opponents in 2022, creating difficult math for stakeholders seeking supermajorities in 2024 needed to block electrification mandates.
—Read more on S&P Global Market Intelligence .
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Technology, Media and Telecommunications
Semiconductor revenues hit record, approach $100B mark
Semiconductor revenues are expected to grow further in the upcoming quarters, fueled by demand for NVIDIA's AI chips and a recovery for other semiconductor business segments.
—Read more on S&P Global Market Intelligence .
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Metals and Mining
China, UK expand mining presence in Africa; US, Canada, Australia lose ground
The number of African mines owned by China- and UK-headquartered companies increased by 21.3% and 11%, respectively, over the past five years while the ownership by companies based in the US, Canada and Australia dropped.
—Read more on S&P Global Market Intelligence .
Supply Chain
Halloween supply chain activity booms
Halloween supply chain activity in the US reached a record high in 2024, with imports of related products rising by 18.6% year over year.
—Read more on S&P Global Market Intelligence .
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The Week in M&A
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Deal Tracker: IT M&A jumps in August as AMD bolsters AI play with $4.9B purchase
Read on S&P Global Market Intelligence
Deal Tracker: Media, telecom M&A value plunges to 6-month low in August
Read on S&P Global Market Intelligence
In $1.1B deal for The General, Sentry doubles-down on nonstandard auto again
Read on S&P Global Market Intelligence
Bank M&A Deal Tracker: NY banks targeted in 3 of 2024's 20 largest deals
Read on S&P Global Market Intelligence
Deal Profile: Michigan-based Sterling Bancorp to sell unit to EverBank for $261M
Read on S&P Global Market Intelligence
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The Big Number
?Read on S&P Global Market Intelligence
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Trending
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