S&P Global — 24 July 2024
Daily Update: July 24, 2024
Emerging Markets Are Emerging at Different Speeds
By Nathan Hunt
Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy
The outlook for emerging markets is primarily one of definition. If China and India are emerging markets, the outlook is one of strong growth and increasing economic strength. That picture looks slightly different if Brazil and Russia are included. Growth in Indonesia, Vietnam and the Philippines tracks between China and India. But growth in Argentina, Mexico and South Africa is lagging. There are differences between emerging markets with strong manufacturing and service economies and emerging markets that depend on the export of commodities and raw materials.
Very few countries can bootstrap their way to economic growth based on domestic consumption. The fastest path to growth for emerging economies is through trade where a lower cost of labor and lighter regulation can offer a competitive advantage. A recent pickup in global trade, along with moderating inflation and more accommodative financial conditions, has improved the global economic outlook, according to S&P Global Market Intelligence.
For emerging markets, the growth picture is different whether the economy is dependent on manufacturing or services. In June, manufacturing production rose at the fastest pace since November 2020, with strong benefits for manufacturing-led economies such as Brazil, India and China. On the other hand, services in emerging economies were notably slow in June. As cost pressures continue to intensify for many businesses in emerging markets — despite moderating headline inflation — confidence has fallen among those businesses.
The long-term outlook for emerging markets from S&P Global Ratings paints a mixed picture. Economic growth is expected to be stronger on average than it was a year ago. However, some economies are experiencing policy-related risks due to political developments and slowing labor productivity.
Financing is critical for the economic growth of emerging markets. Investments in infrastructure and manufacturing development often yield substantial benefits for GDP growth. However, issuance has not been uniformly strong across all emerging markets. Hungary, Malaysia, Thailand and Turkey have all experienced healthy issuance, but issuance from Brazil and Mexico has lagged behind expectations.
According to S&P Global Ratings, the top emerging markets risks for credit conditions are higher lingering interest rates, geopolitical tensions and weaker economic confidence in China due to challenges in the property sector. Protectionism in developed nations also presents an impediment to growth for emerging markets. Finally, unexpected election results in South Africa and India create some policy uncertainty for two leading emerging markets
Today is Wednesday, July 24, 2024, and here is today’s essential intelligence.
The next edition of the Daily Update will be published Monday, August 5.
Where Does The World Stand On ISSB Adoption?
Since the ISSB issued its first two global sustainability standards in June 2023, jurisdictions around the world have stated their intention to adopt the standards or align reporting frameworks with them. Adoption of the standards is gaining traction: As of June 30, 2024, six jurisdictions have adopted the standards on a voluntary or mandatory basis with reporting starting Jan. 1, 2024, and 16 other jurisdictions are planning to adopt them in the future.
—Read the article from S&P Global Sustainable1
Global Consumer Spending Shows Resilience In Second Quarter
Global consumer spending growth remained resilient in the second quarter, according to PMI survey data from S&P Global Market Intelligence, fueled by rising demand for both goods and services. Trends varied by region, however, with Europe seeing consumer spending lagging that of the US and Asia, the latter having led the global spending upturn since late-2022.
—Read the article from S&P Global Market Intelligence
TalkingPoints: US Equities and Sectors in Election Years
The US equity market is the largest in the world, with US-domiciled companies representing 60% of the index market capitalization of S&P Dow Jones Indices’ global equity barometer— the S&P Global BMI — at the end of March 2024. The US also accounts for most of the index market capitalization in 10 of the 11 S&P Global BMI GICS sectors.
—Read the article from S&P Dow Jones Indices
Yemen's Hodeidah Oil Products Import Terminal On Fire After Israeli Attacks
Yemen's Hodeidah port was still on fire on July 21 after Israeli bombs hit the oil products import terminal overnight as the Israel-Hamas war that has disrupted commercial shipping in the Red Sea since November spread to the south of the Arabian Peninsula for the first time.
—Read the article from S&P Global Commodity Insights
East Texas' Post-Beryl Boost In Distributed Power Unlikely To Affect Prices
The East Texas electric distribution system's slow recovery from the July 8 arrival of Hurricane Beryl will likely prompt more installation of distributed solar-plus-battery and fossil fuel generation systems, but an industry expert said this would likely have little effect on wholesale power prices in the area. Almost 3 million electricity customers lost power across Texas in the wake of the storm, and about 260,000 East Texas customers remained offline a week later, prompting Texas Governor Greg Abbott to direct the Public Utility Commission of Texas to investigate why restoration efforts took so long.
—Read the article from S&P Global Commodity Insights
Listen: Climate Tech As Economic Driver — A Chat With Former US Commerce Secretary Bill Daley
In this episode of the Energy Evolution podcast, host Taylor Kuykendall interviews William "Bill" Daley, who was White House Chief of Staff under President Barack Obama and Commerce Secretary during the administration of President Bill Clinton. Daley joined Taylor to discuss the role of climate technologies in driving economic growth and job creation.
—Listen and subscribe to the podcast from S&P Global Commodity Insights
European Structured Finance Conference 2024 (Sept. 5, 2024)
Our conference provides a unique opportunity to hear from S&P Global Ratings' senior European structured finance analysts, renowned industry experts, engage in interactive panel discussions and connect with other market participants in person.
—Register for the event from S&P Global Ratings