All articles tagged with #sandp global
The June S&P Global US Flash PMI shows U.S. manufacturing payrolls contracting for the second straight month, with factory layoffs at the fastest pace since the pandemic and near the worst outside the 2008–09 crisis (excluding COVID). While cooling energy costs ease input inflation, service growth remains subdued and the upturn is being buoyed mainly by inventory rebuilding, raising questions about the durability of demand.
June US manufacturing employment fell at the fastest monthly pace since May 2020, with the S&P Global US Flash PMI’s employment index dropping to 47 from 51.6 in May, signaling contraction even as output grows. Firms cite elevated input costs and policy uncertainty tied to tariffs and the Iran conflict, and overall factory jobs have declined by about 77,000 since the start of Trump’s second term; energy prices easing has cooled some input costs, but concerns persist for manufacturers.
U.S. Treasury yields rose on Thursday due to better-than-expected economic and labor data, with the 10-year yield at 4.479% and the 2-year yield at 4.935%. Positive services and manufacturing indexes, along with a drop in weekly jobless claims, contributed to the increase.
The US manufacturing sector has shown its strongest performance since 2022, with the Institute for Supply Management reporting a reading of 50.3 in March, marking the first expansion since September 2022, and S&P Global indicating a 22-month high in production. This growth has led to optimism among Wall Street strategists, but concerns arise as prices paid increased in both reports, posing a challenge for the Federal Reserve's inflation targets.
S&P Global has downgraded Paramount Global's debt to junk status at BB+ due to weak credit metrics, with a stable outlook, as the studio transitions from linear TV to streaming. The media conglomerate, led by CEO Bob Bakish, is aiming to offset lost linear TV revenues with streaming and digital revenues, but faces challenges in reducing leverage and increasing free operating cash flow. The credit rating agency may further lower Paramount Global's debt rating if these targets are not met, and the studio recently announced plans to cut 800 jobs as part of cost streamlining efforts.
S&P Global downgraded Paramount Global's debt rating to junk status, citing ongoing challenges with free cash flow generation relative to its debt. The agency expects the company's free operating cash flow-to-debt to remain low through 2025 due to the deterioration of the linear television ecosystem and investments in its direct-to-consumer streaming model. The downgrade increases the likelihood of more buyers for its assets, with private-equity firm Apollo Global Management already bidding $11 billion for Paramount Pictures. Paramount's controlling shareholder, Shari Redstone, is reportedly leaning towards a potential merger with Skydance Media. S&P issued a stable outlook, expecting leverage to decline in 2024 as streaming losses improve.
S&P Global has downgraded Paramount Global's credit rating to junk status, citing ongoing pay-TV declines and the shift to a more competitive streaming model as key factors. The company's debt levels are decreasing, but its ratio of free operating cash flow is forecasted to remain below a key threshold. Despite positive assumptions about streaming losses improving, the company's future remains uncertain amid speculation about potential M&A transactions and offers from private investors.
S&P Global is nearing the acquisition of Visible Alpha, a research platform that provides access to financial data and analytics from sell-side analysts. The deal is expected to enhance S&P Global's offerings and expand its presence in the financial research and analytics market.
The US has become the largest oil producer in history, with crude and condensate production reaching a new global record of 13.3 million barrels per day. This surge in output has offset OPEC+ production cuts and is expected to lead to a "new equilibrium" in the oil market, with prices ranging between $75 and $100 per barrel in 2024. Booming US production has eroded OPEC's global market share, and there are concerns that Saudi Arabia may flood the market with crude to regain its share.
The S&P Global "flash" US service sector activity index fell to 54.1 in June, while the manufacturing sector index slid to 46.3, indicating contraction. New orders in the services sector increased at a strong rate, while manufacturers recorded the fastest rate of contraction in new orders since last December. Inflation was seen as moderating, and the overall rate of selling prices for goods and services dropped to the lowest level since late 2020. S&P Global predicts that the US economy is running close to a 2% growth rate in the second quarter.
Seven major companies, including Vice Media, have filed for bankruptcy in a recent 48-hour period, highlighting the exposure of highly indebted firms in the wake of interest-rate hikes. Moody's and S&P Global predict that the trend could continue throughout the year, with defaults for companies with speculative-grade debt expected to rise. The financial sector is under duress, and no industry is safe from balance-sheet bogeys. However, a bankruptcy filing is not necessarily a death knell for a company, as it can give them an opportunity to restructure their debt and come out with a healthier balance sheet.
The US economy has regained growth momentum in April, with S&P Global's preliminary reading on activity across the US economy reaching an 11-month high and the survey's reading on activity in the services sector hitting a 12-month high. The latest reading is indicative of GDP growing at an annualized rate of just over 2%. The report challenges the narrative of an imminent downturn in the US economy, but disagreements in incoming data continue to prove a challenge. The Federal Reserve is expected to raise interest rates by another 0.25% at its latest policy meeting, which is less than two weeks away.
US business activity unexpectedly climbed this month to nearly a one-year high, bolstered by stronger services and manufacturing that threatens to reignite inflationary pressures. The S&P Global flash April composite purchasing managers index rose 1.2 points to 53.5 - the highest since May - the group reported Friday. Firms saw new orders jump to the highest rate in 11 months, especially in the service sector. That allowed businesses to pass on higher costs to customers, resulting in the fastest jump in output prices in seven months. An uptick in inflation would reverse months of progress, even though price growth is still too fast.
First Republic's stock fell by nearly 13% after S&P Global downgraded the bank's credit rating for the second time in a week, citing concerns that the $30 billion rescue package won't be enough. The rating agency lowered the bank's long-term debt rating to B+ from BB+.
Tom Barrack, founder of Colony Capital and a member of First Republic Bank's board, is playing a key role in advising the bank on its options as it seeks to avoid collapse after a $30 billion rescue last week failed to reassure investors. Barrack is working closely with Executive Chairman Jim Herbert in orchestrating any potential deal. Moody's has downgraded the bank to junk, warning that the rescue could weigh on profits, while S&P Global has lowered First Republic's long-term issuer credit rating further into junk territory.