Daily Update — August 20, 2025
Hydrocarbons Throughout US History; August Economic Outlook; and Private Credit Weathers Tariff Uncertainty
Today is Wednesday, August 20, 2025, and here’s your curated selection of Essential Intelligence on global markets from S&P Global. Subscribe to be notified of each new Daily Update.
Energy Transition & Sustainability
Listen: Change Makers: Kent Williamson, author of American Heat Engine
In American Heat Engine: Hydrocarbons and the Power of the United States, Kent Williamson explores the pivotal role of hydrocarbon development in shaping the nation. Williamson joined “EnergyCents” podcast hosts Hill Vaden and Sam Humphreys to share his motivation for writing the book, which is structured around 15 "strategic hydrocarbon bridges."
These bridges symbolize key moments and transitions in American energy history, illustrating how hydrocarbons have influenced the country's growth and transformation. The discussion emphasizes the importance of understanding these historical milestones to gain a deeper appreciation of the current energy landscape in the US.
Economy
Global Economic Outlook: August 2025
In the August update, S&P Global Market Intelligence revised upward its 2025 real GDP growth forecasts for major economies including the US, Canada, the eurozone, the UK and China, primarily due to stronger-than-expected second-quarter GDP data. However, while global Purchasing Managers’ Indexes (PMIs) have shown improvement, particularly in the composite output index, manufacturing PMIs remain weak and output expectations are low.
In contrast, S&P Global Market Intelligence lowered GDP growth forecasts for India and Brazil due to higher-than-anticipated US tariffs. It expects weaker quarter-over-quarter GDP growth rates in the second half of 2025, influenced by rising tariffs, unwinding tariff front-running benefits and ongoing economic uncertainties.
Private Markets
Q3 2025 Private Credit And Middle-Market CLO Performance Weathers Tariff Uncertainty
Despite escalating tariff policies, global financial markets have largely dismissed fears of a recession and economic shocks, settling into a new equilibrium since geopolitics began to significantly shift in April. Contrary to worst-case scenarios, credit conditions have remained robust amid ongoing trade tensions, leading to a notable decrease in market volatility after a partial tariff pause.
The resilience of credit-estimated companies, a vital segment of the private credit market, has been evident, with improvements in performance and key credit metrics in the second quarter of 2025. However, risks persist, particularly for some middle-market borrowers who are facing increased strain. While transaction volumes have stalled, a resurgence is anticipated in the second half of the year. This comeback is being driven by narrowing spreads between the broadly syndicated loan market and the middle market, along with mounting pressure on investors to allocate capital, which will maintain momentum for direct lenders.
In case you missed it
- The volume of Brazil's total lithium spodumene exports fell 73% year over year during the first half of 2025 amid bearish market sentiment.
- Elevated US tariffs are prompting India and Brazil to explore opportunities to boost oil trade. New Delhi is looking for alternatives to Russian oil while Brazil is seeking new markets for its growing crude output.
- Major UK banks should be able to maintain their margin gains over the next year. A stabilizing deposit mix and rising structural hedge yields are providing a sustained earnings boon for much of the sector.
Upcoming events
- Southeast Asia Property: Major Players Stay Solid | August 21 (Webinar)
- Unlocking Trusted Data in Gen AI: Building Agentic Workflows with Kensho | August 27 (Webinar)
- Turbulent Tides: Middle East Tensions and their Impacts on the U.S. Energy Sector and Credit Markets | August 27 (Webinar)