AI fuels tech spending; regional banks grow deposits; PE backs satellite deals
In this edition of Insight Weekly, we examine the increase in tech spending intent by corporations and consumers. S&P Global Market Intelligence 451 Research's US Technology Demand Indicator hit a two-year high in the first quarter, rising to 52.11. A value above 50 indicates expansion. The TDI is a survey-backed composite of US intent to spend on technology and typically predicts revenue performance for tech vendors by up to a few months. The increase in TDI score has largely been driven by enterprise spending on artificial intelligence and related technologies like cloud infrastructure, data management and analytics, and information security. For the past year, the popularization of OpenAI tools has served to accelerate cloud providers' investment in datacenter infrastructure. Datacenter providers are now seeing much larger deal sizes, with customers requesting larger amounts of datacenter space.
Most US regional banks posted both sequential and year-over-year deposit growth in the first quarter even as competition remained intense. Likewise, deposit pricing stayed high, causing all US banks with total assets between $100 billion and $1 trillion that reported earnings between April 15 and April 22 to report net interest margin deterioration, according to an S&P Global Market Intelligence analysis.
Private equity backed nearly half of all deals targeting satellite companies in 2023 as national security concerns and improving industry economics further boosted the appeal of investments in the sector. Private equity and venture capital firms were behind 53, or roughly 49%, of the 108 M&A deals and funding rounds targeting satellite-focused businesses in the past year, according to S&P Global Market Intelligence and Crunchbase data. That was private equity's largest share of satellite industry investment volume since at least 2019.
Rising Tech Spending in Focus
Rising tech spending intent points to AI driving strong earnings
A gauge of tech spending intent by corporations and consumers hit a two-year high in the first quarter, suggesting strong earnings for companies serving the AI market.
—Read more on S&P Global Market Intelligence.
AI drives larger datacenter deals worldwide
The rise of artificial intelligence in the global technology space in the past year has caused a gold rush for digital infrastructure assets.
—Read more on 451alliance.com
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Deep Dives
In-depth features looking at the impact of major news developments in key industries.
Financials
Bank stocks climb after Fed holds rates steady
US bank stocks rose after the Federal Reserve announced it would keep the federal funds rate in the 5.25% to 5.5% range.
—Read more on S&P Global Market Intelligence.
US regional banks grow deposits, but net interest margin pressure persists in Q1
Most US regional banks posted sequential and year-over-year deposit growth in the first quarter, but that growth came at a price as net interest margins declined for all banks in the analysis.
—Read more on S&P Global Market Intelligence.
Still-strong NII, higher fees set to drive Q1 earnings at UniCredit, Intesa
Still-strong net interest income and a slightly improved fees and commissions trend should see Italy's biggest banks report a robust set of first-quarter earnings.
—Read more on S&P Global Market Intelligence.
Japanese banks likely to double down on US Treasurys as local rates rise
Japanese banks are likely to double down on US Treasurys as local interest rates rise, making investments in Japanese government bonds relatively less attractive.
—Read more on S&P Global Market Intelligence.
Insurance
Residential loan surge pushes US life insurers' mortgage holdings to new heights
Mortgage loans held by US life insurers rose 5.5% in 2023 to a new all-time high even as the pace of loan acquisitions fell dramatically on a year-over-year basis.
—Read more on S&P Global Market Intelligence.
Fintech
Banking-as-a-service players at crossroads weighing growth, compliance costs
Banking-as-a-service has evidently brought community banks strong deposit growth, though the recent surge of consent orders shows the gap between growth and those banks' capabilities to handle it.
—Read more on S&P Global Market Intelligence.
Private Equity
Private equity steps in as demand for satellite data grows
Consistent demand for satellite data is drawing more traditional private equity players into an industry where venture capital investors are already active.
—Read more on S&P Global Market Intelligence.
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Credit and Markets
Economic implications of conflict escalation in the Middle East
Iran and Israel's recent exchange of missile attacks has heightened the risk of a wider conflict in the Middle East.
—Read more on S&P Global Market Intelligence.
China's economic reboot adds fuel to trade tensions with US
US efforts to decouple from China are complicated by key US companies' ties to the Asian economy.
—Read more on S&P Global Market Intelligence.
Energy and Utilities
Sunshine deficit shrouds US YOY solar capacity surge in Q1 2024
Most of the US and Canada experienced below-normal radiation in the first quarter of 2024. In Mexico, meanwhile, sunshine levels tracked 20-year averages closely.
—Read more on S&P Global Market Intelligence.
Technology, Media and Telecommunications
Infotech capital activity tops $8B in March as equity offerings hit 3-month high
North American information technology companies raised $8.75 billion through capital offerings in March, up from $4.54 billion in the year-ago period, according to S&P Global Market Intelligence data.
—Read more on S&P Global Market Intelligence.
Metals and Mining
Mining AI still needs human support to reach 'zero entry' goal – robotics exec
Humans will still need to be involved in running AI-enabled mining technology for some time before it is truly autonomous, according to Jeff Sterling, founder of Australian firm Universal Field Robots.
—Read more on S&P Global Market Intelligence.
Supply Chain
Outlook for US supply chain activity
US containerized freight imports have had a stellar start to 2024, with first-quarter growth of 15% year over year, even with supply chain disruptions in the Red Sea, Panama Canal, and port of Baltimore.
—Read more on S&P Global Market Intelligence.
The Week in M&A
Few could face off against BHP in an Anglo American bidding war
Read on S&P Global Market Intelligence
Bank M&A 2024 Deal Tracker: Largest deal of 2024 announced in April
Read on S&P Global Market Intelligence
PG&E Corp. in talks to sell stake in generation spinoff to KKR
Read on S&P Global Market Intelligence
UMB Financial to acquire Heartland Financial in $2B all-stock deal
Read on S&P Global Market Intelligence
The Big Number
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Trending
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