Insight Weekly Nov. 7, 2023

In this edition of?Insight Weekly, we take a close look at coal production in the US and China. After three years of holding relatively steady, US coal production will resume its longer-term trend of secular decline in November, according to federal projections. The US Energy Information Administration expects total annual coal production to fall 2.7% in 2023 compared with 2022, a trend that will accelerate in 2024 as production dives 20.0% year over year. S&P Global Commodity Insights' coal demand forecast shows relatively flat demand through 2024 before a steady decline extending through the rest of the decade. In China, coal production grew 2% year over year to 1.15 billion metric tons in the third quarter of 2023, the smallest quarterly increase since the third quarter of 2021, as authorities ordered safety checks after rising mining accidents, according to an S&P Global Market Intelligence analysis.

Major developed economies — the US, UK, eurozone and Japan — collectively contracted for the third month in a row, according to early Purchasing Managers' Index (PMI) survey data for October from S&P Global. In contrast to Europe, the US saw expansion in both manufacturing output and services activity, although growth rates remained lackluster. Forward-looking data add further to the likelihood of the US outperforming Europe in the months ahead, with a soft landing for the former contrasting with rising recession risks in the latter.

The volume and value of early-stage rounds backed by private equity and venture capital firms, which include pre-seed, seed, accelerator, angel and crowdfunding, have been in decline for six consecutive months since the first quarter of 2022, according to Market Intelligence data. For the year to Oct. 26, early-stage rounds totaled 4,266, on track to finish well below the 8,072 rounds recorded for full year 2022. Transaction value totaled $13.17 billion, compared to $29 billion for the entire 2022.

Coal Production in Focus

Monthly US coal production heading for a cliff, starting ... now

US coal production has held relatively steady since bottoming out in 2020, but output is poised to drop in the winter months and the foreseeable future.

—Read the full article from S&P Global Market Intelligence

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China's coal output growth slows in Q3 2023 amid safety checks, record imports

China's third-quarter coal output grew 2% year over year, the smallest increase in two years, as Beijing tightened mining safety checks, according to an S&P Global Market Intelligence analysis.

— Read the full article from 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

Large US banks ramp up efforts to build capital, slash RWAs in Q3 2023

Most banks with above $100 billion in assets that reported third-quarter risk-weighted assets and common equity Tier 1 capital ratios saw their CET1 ratios increase and RWAs decline as they aggressively prepare for proposed Basel III endgame rules.

— Read the full article from S&P Global Market Intelligence

Asia bank debt issuance plunges in September on interest-rate uncertainties

Banks in the region raised a total $8.78 billion in debt securities in September, down from $28.54 billion in the same month of 2022, according to data compiled by S&P Global Market Intelligence on a best-efforts basis.

— Read the full article from S&P Global Market Intelligence

Australia's biggest banks likely to post growth as margins stay favorable

Three of Australia's four largest banks are expected to post year-over-year increases in net income in their full-year earnings reports as higher interest rates support margins.

— Read the full article from S&P Global Market Intelligence

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Insurance

Claim severity surges for California's largest homeowner insurers

Inflationary pressures from the cost of building materials and labor, along with labor shortages, have drastically increased the average cost per claim on non-catastrophe losses for California's homeowner insurers.

— Read the full article from S&P Global Market Intelligence

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Fintech

451 Research: Fintech funding hits new low in Q3 2023, but late-stage investing resilient

Mature startups, which were hit the hardest in the previous quarters, made a comeback of sorts in the third quarter, recording about 30% year-over-year increases in funding values and deal count.

— Read the full article from S&P Global Market Intelligence

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Real Estate

Shopping center REITs own 12 properties in Rite Aid's initial store closure list

S&P Global Market Intelligence identified 12 properties owned by shopping center real estate investment trusts that are included in Rite Aid's initial store closing list.

— Read the full article from S&P Global Market Intelligence

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Private Equity

Early-stage private equity investments fall further in Q3 2023

The volume and value of private equity-backed early-stage funding rounds has been on a downward trajectory for six consecutive months since the first quarter of 2022.

— Read the full article from S&P Global Market Intelligence

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Credit and Markets

Subdued picture from flash PMI data masks widening growth divergences

US growth is pulling further away from a contraction in European economic activity, according to the latest Purchasing Managers' Index data compiled by S&P Global.

— Read the full article from S&P Global Market Intelligence

Americans working more jobs amid persistently high inflation

A record number of Americans are working two full-time jobs, while the total number of multiple jobholders is also rising.

— Read the full article from S&P Global Market Intelligence

Key US states emerge in domestic reshoring of semiconductor manufacturing

Four states — California, Texas, Oregon, and Arizona — account for nearly half of total semiconductor manufacturing employment in the US.

— Read the full article from S&P Global Market Intelligence

Short sellers boost bets against some oil, gas companies as prices rise

Within the energy sector, oil and gas drilling stocks were the most shorted as of mid-October.

— Read the full article from S&P Global Market Intelligence

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Energy and Utilities

Maine voters to decide on public takeover of utility assets

A question on Maine's November ballot would, if approved, pave the way to establish public utility Pine Tree Power using eminent domain to take over the transmission and distribution assets of the state's two investor-owned utilities.

— Read the full article from S&P Global Market Intelligence

RRA Research: Curtailment, congestion costs rise as transmission upgrades lag renewable growtha

Curtailment and congestion costs in 2022 surpassed highs set in 2021 as transmission and distribution constraints are becoming increasingly problematic. Grid infrastructure investments are soaring but upgrades still lag renewable energy development.

— Read the full article from S&P Global Market Intelligence

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Technology, Media and Telecommunications

Kagan Research: Q3'23 US Consumer Insights survey: Online video use plateaus as pay TV plummets

The adoption of SVOD and free, ad-supported TV services has plateaued in the US with over 80% of internet households watching online video. The decline in pay TV subscribers accelerated in 2023 to barely half of total internet households.

— Read the full article from S&P Global Market Intelligence

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Metals and Mining

Battery innovators play long game to break lithium's lock on energy transition

Fueled by billions of dollars of investment, developers of alternatives to the dominant energy-storage chemistry believe they are on the brink of breakthroughs for more sustainable, lower-cost, harder-working and longer-lasting options.

— Read the full article from S&P Global Market Intelligence

Metals and Mining Research: SOTM June quarter 2023 – Relative market stability, subdued exploration activity

The mining industry was characterized by relative market stability despite a hazy macroeconomic outlook. Financings were down, however, as was exploration activity, with the S&P Global Market Intelligence Pipeline Activity Index sliding to 92.

— Read the full article from S&P Global Market Intelligence

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Supply Chain

Time to level up: Videogame console supply chains

An average 54% of US imports of games consoles have arrived in the August through November period each year, S&P Global Market Intelligence data shows, with a peak in September and October.

— Read the full article from S&P Global Market Intelligence

Leveraging corporate commentary and earnings data for supply chain insights

The reduced mentions of supply chains as a topic in company earnings calls likely reflects the passing of the worst of congestion in logistics networks after a slide in demand for large- and heavy consumer goods.

— Read the full article from S&P Global Market Intelligence

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The Week in M&A

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Deal Wrap: Thoma Bravo closes Adenza sale; Greenbelt-led group buys Saber Power

Read the full article from S&P Global Market Intelligence

US bank deal discussions buzzing despite rate mark pain

Read the full article from S&P Global Market Intelligence

Healthcare REIT merger offers growth path despite chilly reception, analysts say

Read the full article from S&P Global Market Intelligence

Private equity take-private deals hit 16-year high

Read the full article from S&P Global Market Intelligence

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The Big Number

Read the full article

Trending

— Read the full article from S&P Global Market Intelligence and follow @SPGlobal and @SPGMarketIntel on X, formerly known as Twitter.

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Questions or feedback? Contact Steve Matthewson ([email protected] ) at S&P Global Market Intelligence.