Insight Weekly: US stock market downturn; Chinese bank earnings; Europe’s big tech bills – S&P Global

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Today is Tuesday, May 24, 2022, and here’s your weekly selection of essential intelligence on financial markets and the global economy from S&P Global Market Intelligence. Subscribe to be notified of each new Insight Weekly.

In this edition, we put the spotlight on U.S. equities. Rising bond yields and tightening financial conditions are driving the downturn in a stock market used to cheap money and ample liquidity. At its recent low close in mid-May, the S&P 500 had shed more than 17% since the start of the year as investors fled from risk assets. While the sell-off has been broad-based, growth stocks have borne the brunt, while value sectors like energy and utilities have fared better than the wider market. Consumer discretionary stocks are the worst-performing sector of the S&P 500 index this year, amid soaring inflation, strained global supply chains and plummeting consumer sentiment.

China’s four biggest banks by assets reported mid-single-digit earnings growth in the first quarter of 2022, buoyed by steady net interest margins and an average 5% growth in loans with stable asset quality. Chinese banks’ earnings will likely stay steady in 2022 despite economic uncertainties facing the world’s second largest economy, as the central bank’s calibrated easing will help relieve pressure on margins.

A pair of proposed laws from the European Union target big tech firms, and they will affect different companies in different ways. Experts agree that the Digital Services Act is likely to have the biggest impact on companies that rely on advertising or e-commerce, while the Digital Markets Act will mostly affect companies that have a hardware component related to their software offerings, including Apple, Alphabet and Microsoft.

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Compiled by Louis Bacani

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