Blog — 23 Nov, 2021
Insight Weekly: LNG exports surge; investors unfazed by inflation; neobanks drive VC funding
By Jasim Zahid
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In this edition, we take a close look at the surge in U.S. LNG exports that has sent natural gas prices to their highest level in years amid a global energy crisis. World buyers are desperate to find available LNG cargoes, while natural gas experts say the U.S. may have reached an inflection point in its rise as an LNG producer. The increase in LNG contract activity has bolstered the prospects of export projects getting commercially sanctioned over the coming year, according to a Goldman Sachs forecast.
While inflation has surged to levels not seen in more than three decades, the government bond market seems to be buying the Federal Reserve's argument that inflation will not stick around. The Consumer Price Index, the market's preferred inflation metric, jumped 6.2% in October, the highest year-over-year increase since November 1990.
Venture capital investments in the U.S. financial technology space hit $9.33 billion in the third quarter, representing a 122% jump from the year-ago period, with banking technology and payment startups that derive revenues from interchange fees a big draw among investors.
US Liquefied Natural Gas in Focus
High gas prices boost chances of US LNG projects getting built – Goldman Sachs
Analysts pointed to Cheniere and Venture Global projects as likely to advance. Both developers have benefited from an increase in LNG contracting activity amid a global gas crunch.
Read the full article from S&P Global Market Intelligence
Surging US LNG exports hike domestic gas prices amid global supply crunch
U.S. LNG shipments to world buyers are soaring amid a global natural gas shortage, but the impact on domestic U.S. prices has raised fresh questions about the role of gas exports.
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
Banks reckon with potential deposit outflows as inflation heats up
Deposits have continued to grow rapidly, but a pivot by the Fed and a red-hot inflation report has the industry thinking about a reversal.
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High-yield savings products fall back in fintech-bank battle for market share
Large banks have been retreating from the battlefield of high-yield savings as competition for core retail customers has shifted toward prioritizing a full suite of products.
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As BNP Paribas explores sale of US unit, some raise doubts on Canadian buyers
The French bank is looking to sell Bank of the West, according to a media report that named Canadian banks among the potential suitors. But some analysts are skeptical the Canadian giants would be a good fit.
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US banks' capital raises grew 29.4% in October
Capital raising by publicly traded U.S. banks was 65.4% higher in October than a year earlier, according to S&P Global Market Intelligence data.
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Insurance
Auto weakness apparent in historically large State Farm Q3 underwriting loss
State Farm's third-quarter combined ratio spiked to its highest point in a decade amid elevated losses in both the homeowners and auto business. While the former was not unexpected after Hurricane Ida made landfall, the latter is cause for concern.
Read the full article from S&P Global Market Intelligence
Reinsurers hit hard by catastrophes in Q3, look ahead to higher rates in 2022
Select global reinsurers posted revenue beats, but three of the biggest companies logged EPS misses, according to an S&P Global Market Intelligence analysis.
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Credit and Markets
New Fed trading restrictions raise enforcement doubts
The Federal Reserve is developing systemwide constraints on securities transactions, including restricting active trading, as observers question how they will be enforced.
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Bond investors unfazed, so far, by alarming inflation numbers
Consumer price index hits highest point since 1990, but long-term bond yields fall.
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Inflation to play role in Biden's Fed chair selection, analysts say
The ongoing rise in inflation may give Federal Reserve Chairman Jerome Powell a slight edge over other candidates as President Joe Biden mulls who he will pick to lead the central bank, analysts say.
Read the full article from S&P Global Market Intelligence
Energy and Utilities
FERC hears support for transmission rule targeting renewable energy-rich zones
As part of its sweeping electric transmission rulemaking, the Federal Energy Regulatory Commission staff heard cautious support for a potential requirement that would lead to the identification of renewable energy zones throughout the U.S.
Read the full article from S&P Global Market Intelligence
New DOE office could help bridge 'valley of death' for clean energy technologies
The soon-to-be-enacted infrastructure bill from Congress will create a new Office of Clean Energy Demonstrations that could deploy hydrogen production and other cutting-edge technologies.
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COP26 deal reached: Nations target coal, pledge more climate action in 2022
The Glasgow Climate Pact adds pressure on nations to quickly ramp up efforts to keep global temperatures from rising past 1.5 degrees Celsius from preindustrial levels, but it falls short on climate finance.
Read the full article from S&P Global Market Intelligence
Real Estate
Streaming adds heat to studio real estate market as ViacomCBS sheds assets
Competition for content production is driving up spending, and private real estate investment firms are finding a way to put money in the game.
Read the full article from S&P Global Market Intelligence
Technology, Media and Telecommunications
FTC nominee signals support for privacy rules, Big Tech regulations
If confirmed, Alvaro Bedoya is considered a key vote on pending enforcement action related to Big Tech mergers as well as privacy rulemaking.
Read the full article from S&P Global Market Intelligence
The Week in M&A
Algonquin could sell assets to fund Kentucky Power, transmission acquisition
Glencore's strategy shift opens door for Evolution's acquisition of Ernest Henry
European financial services M&A activity dips in October
The Big Number
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