Utilities face headwinds; S&P 500 dividend hikes likely; dollar poised for rally
Today is Tuesday, May 02, 2023, 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 of?Insight Weekly, we take a close look at the earnings forecasts for global utilities in the first quarter of 2023. Analysts expect few US multi-utilities to report year-over-year earnings growth as the sector grapples with the strongest headwinds in years, including warmer-than-normal first-quarter weather, higher interest expense and inflationary pressure. In Europe, utilities' earnings are expected to come in strong in the first quarter but stay below the 2022 records. Electricity and gas prices have declined as industrial shutdowns and a mild heating season lowered demand during the quarter, ultimately reducing power production in Europe's five largest markets — Germany, France, the UK, Italy and Spain, according to S&P Global Commodity Insights.
Dozens of S&P 500 companies will raise their regular dividend payments in the coming months, according to S&P Global Market Intelligence forecasts. Companies took advantage of near-zero interest rates during the COVID-19 pandemic to keep financing costs manageable, said Ryan Boyd, Market Intelligence head of business development for the Americas.
The US dollar is primed for new strength after largely falling over the past several months. As inflation remains well above the Federal Reserve's 2% target, the central bank is increasingly expected to keep rates high for much longer than previously anticipated, a shift that will likely boost the dollar in the coming weeks.
Earnings Outlook for Utilities in Focus
Mild winter adds to strongest headwinds in years for gas utility EPS – analysts?????????????
Wall Street expects mixed first-quarter earnings from gas utility operators as mild winter weather compounds existing headwinds.
—Read the full article from S&P Global Market Intelligence
2023 outlook for European utilities upbeat, though down from record 2022
With prices decreasing, the 2022 earnings bonanza will not be repeated in 2023, analysts say. Policy tailwinds in the US will benefit utilities exposed to the market.
—Read the full article from S&P Global Market Intelligence
Deep Dives
In-depth features looking at the impact of major news developments in key industries.
Financials
Biggest banks emerge from March turmoil with net interest income outlooks intact
The four largest US banks confirmed that they had been recipients of large deposit shifts after the bank failures in March, though they tended to deny that the inflows were decisive for their performance.
—Read the full article from S&P Global Market Intelligence
First Republic records largest jump in short interest among US banks in March
Short interest in First Republic Bank soared in March as concerns over the institution spiked amid the bank's significant deposit outflows following the failures of two other regionals.
—Read the full article from S&P Global Market Intelligence
Credit Suisse Q1 outflows underscore challenge facing UBS
Credit Suisse booked CHF61.20 billion of net asset outflows in the first three months of the year, while assets under management in its flagship wealth division dropped to CHF502.5 billion.
—Read the full article from S&P Global Market Intelligence
Indian banks' market cap decline in Q1 on Adani exposure concerns
Lenders with exposure to the embattled Adani Group were among the Indian banks with the worst declines in their market capitalization in the first quarter, after a US-based short seller's report targeted the infrastructure and energy conglomerate.
—Read the full article from S&P Global Market Intelligence
Latin America's 50 largest banks by assets, 2023
Brazilian banks held all five top spots in the rankings, with Itaú Unibanco once again leading the way.
—Read the full article from S&P Global Market Intelligence
Insurance
Financials Research: P&C insurers issued surplus notes at highest pace in years despite rising cost
Unique organizational structures and circumstances contributed in 2022 to the highest volume of surplus notes issuance by US property and casualty insurers since 2008, an S&P Global Market Intelligence analysis finds.
—Read the full article from S&P Global Market Intelligence
Financial Technology
Banks' blockchain payment networks challenged by perceived links to crypto
The myth that blockchain-enabled payments are exclusively tied to cryptocurrency is making it more difficult for the networks to realize greater adoption.
—Read the full article from S&P Global Market Intelligence
Real Estate
REIT at-the-market program usage picks up in Q4 2022 with $6B raised
US equity real estate investment trusts raised $6.00 billion through their at-the-market programs, a significant increase compared to a quarter earlier but down from the fourth quarter of 2021.
—Read the full article from S&P Global Market Intelligence
Private Equity
Private equity backed IPOs nonexistent in Q1; total exit activity slumps
The total number of private equity exits globally during the first quarter was 322, down 29.2% from the same period in 2022.
—Read the full article from S&P Global Market Intelligence
Credit and Markets
领英推荐
Dozens of S&P 500 companies expected to hike dividends in coming months
Nearly one-third of the consumer staples constituents are expected to increase dividend payments, the highest percentage of any sector.
—Read the full article from S&P Global Market Intelligence
Political scenarios for Turkey’s presidential and general elections
Turkey's joint presidential and general elections are scheduled for May 14. S&P Global Market Intelligence examines potential electoral scenarios and their policy implications over a 12-month outlook.
—Read the full article from S&P Global Market Intelligence
Energy and Utilities
RRA Research: Big Apple hydropower plans could bite into NYISO battery storage prospects
Operating only 106 MW of battery storage, New York state is looking to achieve 6 GW by 2030. But it is also taking steps to import non-intermittent green energy, weighing on the need for battery solutions.
—Read the full article from S&P Global Market Intelligence
Permian drillers likely to keep up payments to shareholders after Q1 results
Inflation is down in the oil patch and — thanks to OPEC — Permian Basin shale oil exploration and production companies are seeing a firmer oil price.
—Read the full article from S&P Global Market Intelligence
US power providers pursue decarbonization in turbulent economic environment
The emerging consensus among industry experts, executives, grid operators and private asset managers gathered at the Platts Global Power Markets Conference in Las Vegas was that resource planning and grid management need to change.
—Read the full article from S&P Global Market Intelligence
Technology, Media and Telecommunications
451 Research: Microsoft, OpenAI partnership provides cybersecurity's generative AI moment
Microsoft has captured the attention of the cybersecurity and AI communities with Security Copilot, an implementation that applies OpenAI's GPT-4 large language model in generative AI along with a security-specific Microsoft model.
—Read the full article from S&P Global Market Intelligence
Metals and Mining
Metals and Mining Research: Zinc CBS April 2023 – Prices fluctuate on economic, supply uncertainties
Zinc prices retreated throughout the March quarter amid volatile market conditions but remain supported by low inventories and power curbs in China.
—Read the full article from S&P Global Market Intelligence
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The Week in M&A
US power M&A deal values grow YOY in Q1 2023
Deal Profile: Ohio-based Farmers Bank and Savings Co., Nelsonville Home & Savings to merge
Deal Tracker: Radius Global deal leads media, telecom M&A in March
Deal Tracker: Infotech M&A activity drops YOY in March
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Written and compiled by Waqas Azeem