Daily update October 26, 2022

Daily update October 26, 2022

Start each business day with our analyzes of the most pressing developments affecting markets today, along with a selection of our latest and most important insights into the global economy.

A cyber strategy is table betting

The new S&P Global”Cyber ​​trends and credit risksThe report argues that a company’s cyber defenses are a material aspect of risk management, given the changing nature of cyber threats and the evolution of the threat to core business functions. This means that a lagging or below-average cyber strategy could affect a company’s credit rating, making it more expensive to raise capital. A effective cyber strategyincluding robust cyber defense and mitigation plans, is the stakes for companies participating in the capital markets.

So far, cyberattacks have had a limited impact on credit scores. In the last 10 months, there have been 50 negative credit rating actions by S&P Global Ratings related to risk management, culture and supervision. A small subset of those actions were related to cyber attacks. Weak cyber security appears to be correlated with weak overall risk management. Inadequate cybersecurity or mitigation measures can potentially result in lower credit ratings than its peers with similar financial metrics.

Cyber ​​attacks in movies and popular imagination tend to involve “hackers” breaking into networks. But technical attacks have become more challenging due to superior threat detection in modern cloud computing environments. This has led attackers to focus on human nature. The “2022 Verizon Data Breach Investigations Report” indicated that 82% of breaches involve social engineering, including stolen credentials, phishing and misuse, as well as errors. According to the “Voice of the Enterprise: Information Security, Budgets and Outlook 2022” study by 451 Research from S&P Global Market Intelligence, user behavior is the main information security problem.

Many companies have responded to cybersecurity concerns by contracting with third-party vendors, but this can present risks. Strong vendor management policies are critical to limiting credit shocks. Many of the highest impact attacks appear to be directly or indirectly related to sovereign actors that have access to advanced tools and vast resources. Cyber ​​warfare and espionage will increase cyber risks for issuers.

Cyber ​​insurance has grew rapidly in recent years and continues to evolve. According to S&P Global Market Intelligence, cyber insurance provider Coalition saw its July 2022 valuation rise 40% as of September 2021. Cyber ​​insurance can be an effective way to transfer partial risk from a credit perspective. However, many cyber insurance providers also require strong cyber defenses to be in place.

Some companies that have suffered a cyberattack have chosen to keep the attack and its response secret. However, regulation in favor of cybersecurity disclosure and cyber events is likely. This makes cybersecurity an increasingly vital part of a company’s risk management framework. Cyber ​​threats are unavoidable, which makes cyber security economically important.

Today is Wednesday, October 26, 2022and here is today’s essential intelligence.

Written by Nathan Hunt.


Flash PMI data signaled higher recession risks in the US and Europe

Preliminary PMI data for October showed economic contractions were accelerating in the US, eurozone and UK, leaving Japan as the only major developed world economy to achieve expansion at the start of the fourth quarter. . However, even in this latest trade, confidence in the outlook has deteriorated, presenting pessimistic sentiment for the year ahead in major advanced economies. Therefore, this strongly suggests that the economic growth trend will weaken further in the coming months.

—Read the article S&P Global Market Intelligence

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capital markets

Real-time payment networks are growing, but banks are still looking for uses

The future success of real-time payment platforms owned by the Federal Reserve and the largest US banks depends on whether financial institutions and fintechs can find real uses for the technology. Real-time payments are still in their infancy in the US: The Clearing House, a company owned by Bank of America Corp.; JPMorgan Chase & Co.; Citigroup Inc.; Wells Fargo & Co.; and other big banks launched the nation’s first real-time payment platform, or RTP, in 2017, while the Federal Reserve scheduled the production launch of its own planned platform, the FedNow Service, from May to July 2023.

—Read the article on S&P Global Market Intelligence

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global trade

US refiners head into earnings season with higher margins, export ban threatened

US refiners are likely to show some optimism during upcoming third-quarter earnings calls as margins remain high due to tight diesel supplies ahead of the peak winter heating season. However, refiners may also hit some oil demand headwinds as the global economy remains far from bullish and the Biden administration raises the possibility of an export ban in its bid to drive down prices.

—Read the article S&P Global Commodity Outlook

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Southeast US CO2 trends suggest the region is primed for green investment

Due in large part to clean air commitments from local utilities, the Southeastern US that is not inclined toward the renewable portfolio standard achieved a steeper reduction in CO2 emissions than the rest of the US. between 2005 and 2021, illustrating a path to successful decarbonization outside of broad mandates. However, decarbonization is not necessarily synonymous with green energy. Energy providers in the region largely took advantage of the substitution of natural gas for coal generation and, to a lesser extent, the expansion of nuclear power to reduce carbon emissions, falling notably behind on the renewables front. compared to other parts of the US

—Read the article S&P Global Market Intelligence

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Energy and raw materials

Listen: COP27: a critical year for global climate negotiations

With geopolitical and economic pressures dramatically altering the landscape since the last meeting in Glasgow, S&P Global Commodity Insights tackles the most pressing questions ahead of this global climate meeting. Vandana Sebastian talks to Roman Kramarchuk and Dan Klein about what to expect at COP27, whether countries can reach a consensus on climate goals, the importance of decarbonisation in a world of evolving energy priorities, and the relevance of COP27 in the midst of of the global energy crisis.

—Listen and subscribe to Future Energy, a podcast from S&P Global Commodity Outlook

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Technology and media

Apple’s latest iPhone pricing structure pushes consumers toward pro models

The iPhone 14 lineup was announced on September 7, with four new models, three of which share the price points of their direct predecessors in the iPhone 13 lineup. While this might seem like the cost of buying a smartphone Apple’s price tag would remain the same as before the 14 launch, the discontinuation of the inexpensive iPhone 11 and iPhone 12 mini, along with the introduction of the iPhone 14 Plus, instead increased the median price of all iPhones by $100.

—Read the article S&P Global Market Intelligence

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