Corporate Treasury Data Insights: How low can equities go?

Andrew Hollins, Director of Corporate Treasury Proposition at Refinitiv, brings you a round-up of the latest Corporate Treasury Data Insights, including exploring the potential for further falls in equities, the risks of imposing sanctions on Russia and the detail on Sri Lanka’s economic crisis.

1. What does the latest economic data say about the prospects for equity markets?
2. How resilient is Russia under the pressure of economic sanctions and what risks are posed to the rest of the international community?
3. We use the Refinitiv StarMine Sovereign Risk Model to analyse the development of the crisis in Sri Lanka that has caused such social, political and economic upheaval.

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Chart of the Month

Assistant Treasurer, Charles Van Vleet, chats to Real Vision’s Jamie McDonald in this recent episode of The Big Conversation from Refinitiv.

The episode explores economic data to look at whether recent weakness in equity markets could have further to go amidst signs of an economic slowdown.

Although regional manufacturing surveys are rolling over, mixed signals are coming coming from other important indicators which suggest the outlook might not be quite so bleak, Charles explains.

Earnings estimates may have further to fall, but it’s possible that it won’t be a repeat of previous crises given favourable debt service ratios that can support consumers.

There does not appear to be any pressure on the Fed’s balance sheet yet because credit is still broadly available, and while a strong dollar is beneficial for the U.S. economy, the rest of the world might experience its adverse side effects.

In the episode, Charles likens inflation to a tax that is regressive which negatively impacts those with less disposable income.

Before the Ukraine invasion, inflation was seen as transitory but now 30 percent of rolled crops have been permanently destroyed.

Charles also explains that in his opinion, the increase in the oil price is a one-off and that oil is now likely to stabilise. It is a fungible commodity and Russian oil will continue to be sold to the East while Saudi Arabia will sell oil to the West. In his opinion, the energy impact is now largely over.

Watch the latest episode of The Big Conversation

Sunshine-backed bonds tipped for take-off in Europe

The first European solar panel securitisations are in the works and are expected to appear as soon as the second half of this year, as Europe plays catch up with the well-established market in the U.S. Is this the golden era for solar?

Carbon markets on a bull run: emissions trading gains influence

Refinitiv’s 2022 carbon survey emphasises the importance of carbon markets in reducing greenhouse gas emissions, while respondents expect prices to rise significantly in almost all carbon markets through 2023, and anticipate strong growth for the voluntary carbon market. Are carbon constraints causing companies to cut their emissions?

Could sanctions against Russia backfire?

Edward Chancellor, a Reuters Breakingviews columnist considers lessons from history, international unity and the ability of Russia to withstand impacts to address the consequences of sanctions on the country. Find out how effective sanctions against Russia are likely to be.

What’s behind Sri Lanka’s economic crisis?

We use the StarMine Sovereign Risk Model (StarMine SR) to analyse the development of the economic crisis in Sri Lanka, which caused the nation to default in May 2022. Read the full analysis.

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