Today is Tuesday, August 16, 2022, 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, we examine the U.S. Inflation Reduction Act, a Senate bill packed with $369 billion in energy security and climate change spending. The bill includes renewable energy and energy storage tax credits that could accelerate the clean energy transition, industry executives say. The legislation puts the U.S. within reach of its 2030 emission reduction target, but the nation still would need additional policies to get there, according to analysts. Some experts say the measure also will raise the stakes for expanding the U.S. electric transmission system and expedite environmental reviews.
Most financial technology companies, payment processors and specialty finance companies that have reported second-quarter earnings saw quarter-over-quarter declines in their EPS, according to S&P Global Market Intelligence data. Headwinds from the volatility in foreign-exchange rates and the current macro environment hurt companies' revenue growth.
Supply chain disruptions are pushing up the price of machinery and raw materials, driving increases in production costs for equipment manufacturers and mining companies that are rethinking their existing equipment fleets. The equipment shortage has had varying impacts on miners' activities and forced them to make unusual sourcing choices.
- In Focus: U.S. Climate Bill
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Clean energy CEOs exalt 'historic' US climate bill despite complexity
"When it comes to this Inflation Reduction Act, you're finally unshackling us by creating an investment tax credit that is not tied to solar," said one energy storage executive. But there are concerns over some of the bill's requirements.
—Read the full article from S&P Global Market Intelligence
Climate bill needs other policies, laws to take US across 2030 finish line
The Inflation Reduction Act is projected to reduce U.S. greenhouse gas emissions by about 40% by 2030, less than the country pledged under the Paris Agreement on climate change. Energy and car emission rules can do the rest, experts said.
—Read the full article from S&P Global Market Intelligence
'Lots of work left to do' on US grid expansion as climate bill nears passage
With the Inflation Reduction Act expected to pass, the U.S. needs to redouble policy efforts to speed up an electric transmission build-out and expedite environmental reviews, according to industry experts and project developers.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Financials
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US consumer agency using 'every tool' to step up scrutiny of financial institutions
Consumer advocates have welcomed the Consumer Financial Protection Bureau's approach, but it has raised concern in the financial services industry about whether the agency is going too far.
—Read the full article from S&P Global Market Intelligence
US banks report sharp drop in Russia exposure
Data shows substantial declines in financial ties to the country after its invasion of Ukraine, but significant risks remain.
—Read the full article from S&P Global Market Intelligence
Mexican banks record higher Q2 profits as lending activity increases
Grupo Financiero BBVA México, Grupo Financiero Banorte and Grupo Financiero Inbursa saw second-quarter profits improve from a year ago.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Fintech
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Most fintechs, payment processors, specialty lenders see earnings fall QOQ
Headwinds from foreign exchange volatility weighed on the revenue growth of financial technology companies.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Insurance
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Insurance broker M&A activity slows in H1 after big finish to 2021
There were 176 and 190 insurance broker M&A transactions in the first and second quarters of 2022, respectively, compared to more than 400 deals in the fourth quarter of 2021.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Technology, Media and Telecommunications
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Technology M&A declining in Europe, US as valuations converge
Europe did not see the same steep drop in larger second-quarter information technology deals that the U.S. saw, but Europe's deal values were also much smaller in overall size.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Metals and Mining
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Supply chain shortages pushing up miners' equipment costs
In second-quarter earnings calls, multiple miners and equipment manufacturers pointed to challenges in obtaining needed materials or equipment.
—Read the full article from S&P Global Market Intelligence
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- Deep Dives: Energy and Utilities
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Droughts rattle Europe's hydropower market, intensifying energy crisis
Some of Southern Europe's largest hydro operators saw production shrink in the first half of 2022 due to high temperatures and low rainfall. The situation, combined with lower nuclear output and squeezed gas supplies, points to a potentially tight winter.
—Read the full article from S&P Global Market Intelligence
Time has all but run out for world's 'largest carbon capture project'
Enchant Energy, which is pursuing a $1.4 billion carbon capture project at the San Juan Generating Station, has yet to address the "threshold issues" blocking a plant transfer, the facility's current owners said. The plant is set to close Sept. 30.
—Read the full article from S&P Global Market Intelligence
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- The Week in M&A
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Petropavlovsk's $619M asset sale leads metals, mining M&A for week ended Aug. 5
Seacoast Banking Corp. of Florida acquiring Professional Holding in $488.6M deal
Deal Tracker: Hot infotech M&A takes a cold dip in July
Bank M&A 2022 Deal Tracker: 15 deals announced in July
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Written and compiled by Louis Bacani