Daily Update: Strong Growth in Final Quarter of Biden Era
Today is Wednesday, February 19, 2025, and here’s your?curated selection of essential intelligence on financial markets and the global economy?from?S&P Global.?Subscribe?to be notified of each new?Daily?Update.?
Early results from the fourth quarter of 2024 point to accelerating growth, with strong revenue, EBITDA and sales gains for US corporates. Capital expenditures have increased 14% for North American companies as interest rate pressure eases, according to S&P Global Ratings analysts in “Corporate Results Roundup Q4 2024.” The accelerating growth indicates an economy in danger of overheating, if predictions of additional growth driven by large-scale deregulation are realized, or of stalling, if tariffs begin to impact US corporates.
The technology, media and retail sectors had the strongest positive impact on growth, while the metals and mining, oil and gas, and aerospace and defense sectors dragged growth. Sales growth on a year-over-year basis was strongest in the hotels, gaming and leisure sector at 22.7% and weakest in the utilities industry at negative 11.2%.
For companies rated by S&P Global Ratings that report quarterly, year-over-year revenues are up 2.5% based on current results, and 3.9% if commodity-linked sectors are excluded. The equivalent EBITDA figures are 6.4% and 10.2%, respectively, implying expanding profit margins. EBITDA growth in North America was notably strong for tech giants, increasing 42.6% at Amazon.com, 34.2% at Alphabet and 41.7% at Meta Platforms. At the other end of the spectrum, Valero Energy, Marathon Petroleum and Phillips 66 posted double-digit negative growth.
While these early results are strong, they are based on results from only about 35% of rated North American companies. Because early reported results typically come from strong-performing companies in growth industries — those eager to share good news — there may be upward bias.
Analysts from S&P Global Ratings have monitored earnings calls to determine if anticipated US tariffs are affecting earnings guidance. However, uncertainty about the size and scope of the tariffs has made their repercussions difficult to calculate, with companies offering several contingencies.
“With respect to possible tariffs, we are working across our supply chain logistics network and assembly plants so that we are prepared to mitigate near-term impacts,” General Motors CEO Mary Barra said on a recent earnings call. “We also sell trucks globally, and so we can look at where the international markets are being sourced from. So there's plays that we can do on that perspective to minimize the impact if there are tariffs either on Canada or Mexico.”
Today is Wednesday, February 19, 2025, and here is today’s essential intelligence.
Written by Nathan Hunt.
Sustainability
What’s in a Name? From S&P 500 ESG Index to S&P 500 Scored & Screened Index
Over the last 10 years, sustainable investing has become increasingly prevalent, and concerns surrounding the risk of greenwashing have increased. To assist S&P DJI’s customers with new European Securities and Markets Authority (ESMA) fund naming guidelines, S&P DJI announced the renaming of the S&P 500? ESG Index to the S&P 500 Scored & Screened Index.
—Read the article from S&P Dow Jones Indices
Economy
European Defense Funding: What are the Options?
Russia's 2022 invasion of Ukraine has exposed Europe's security vulnerabilities. Despite almost doubling their defense expenditure since 2014, European nations on average still spend below NATO's 2% of GDP guidelines, while the US finances nearly two-thirds of NATO's military budget. At the national level, fiscal constraints limit European sovereigns' capacity to boost military expenditure. As a consequence, European governments are exploring joint financing options for defense, such as EU-backed bonds or other supranational issuances. Increasingly, member states argue that for this collective security guarantee to be credible, NATO's European nation states together need to find a way to coordinate and increase defense spending at the supranational level.
—Read the article from S&P Global Ratings
Capital Markets
Private Financings Gain in Popularity Among GCC Issuers
Over the past decade, GCC issuers mainly relied on banks, bonds and sukuk to meet their funding needs. The total amount of private capital financings raised by GCC issuers between 2020 and 2024 increased significantly to $54.8 billion, from $10.4 billion between 2015 and 2019, and is set to rise further. S&P Global Ratings expects private capital financings in GCC countries will gain in importance over the next few years, particularly considering higher interest from private capital providers in the region.
—Read the article from S&P Global Ratings
Global Trade
G7 to Link Any New Sanctions to Russia’s Approach to Ukraine Peace Talks
Any G7 sanctions after February will be linked to whether Russia negotiates in good faith to end the conflict in Ukraine, G7 foreign ministers said in a joint statement released Feb. 15. The G7 covers Canada, France, Germany, Italy, Japan, the UK and the US. Alongside allies in the EU and Australia, it imposed price caps on Russian oil as part of its response to Russia's full-scale invasion of Ukraine.
—Read the article from S&P Global Commodity Insights
Energy & Commodities
Middle East Rigs Move Out of Region After Aramco-Led Slide
Middle East drilling rigs suspended since Saudi Arabia's decision to halt a long-planned expansion of its oil production capacity and reduce upstream capital expenditures last year have been moved to many other parts of the world after a 21% slide in average day rates for premium jackup rigs in the past year, according to the principal research analyst at Petrodata Rigs in London.
—Read the article from S&P Global Commodity Insights
Technology & Innovation
MediaTalk | Season 3 | Ep. 7 — Broadband's Biggest Questions in 2025: Amazon, Starlink and BEAD
MediaTalk host Mike Reynolds is joined by S&P Global Market Intelligence Kagan analyst Mau Rodriguez to discuss the current and future state of the US broadband industry. New technologies are changing the ways Americans connect and a new administration is raising questions about a major federal subsidy program. Fiber and fixed wireless were the primary drivers of growth last year, but that could change going forward depending on the competitive landscape of satellite broadband.
—Listen and subscribe to the podcast from S&P Global Market Intelligence
Events & Webinars
CERAWeek 2025 | Moving Ahead: Energy Strategies for a Complex World (Houston, Texas | March 10-14, 2025)
CERAWeek 2025 will explore how policy shifts, technological breakthroughs and geopolitical dynamics are reshaping the global energy landscape through?14 key themes. Join us March 10-14 in Houston and let’s explore how energy security, policy and AI will transform markets and infrastructure.—Register for the webinar
Senior All-Source Analyst | MGM, MBA, MAF
1 周Of course it was, but Trump will try to grab the credit.
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1 周help
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1 周Very informative
Director administration, management and operations
1 周Insightful
A visionary and results-driven leader in sustainable development and public service, specializing in Bold Strategic AI (SAI) Leadership to drive innovation, efficiency, solutions, and positive global impact.
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