Daily Update: June 8, 2021

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In the aftermath of the coronavirus crisis’ deepening of socioeconomic inequalities, and the protests and pledges that followed George Floyd’s murder by police last summer, global businesses have centered their attention on improving social equity in the workplaces and communities in which they operate. But this doesn’t diminish the larger truth that structural and systemic racism has long stymied the economic advancement and prosperity of Black communities in the United States and United Kingdom.

New research shows how these countries and their companies need to prioritize eliminating the barriers that block Black workers’ educational and professional opportunities.

In the U.S., misogynoir—the dual oppression of sexism and racism that actualizes in misogyny against Black women—carries a significant social and economic cost for the country. According to research from S&P Global’s Diversity Research Lab, the U.S. economy would have generated an additional $107 billion in economic activity from 1960-2019 if the educational attainment of Black women had kept pace with that of white women, with all other factors constant. If Black women had kept pace with white women in graduating from college, there would have been another eight percentage points more college-educated Black women in the workforce by 2019—or 44.5% of working-age Black women with a college degree by 2019. In addition, if Black women had been able to obtain opportunities that matched their education and skill sets, the productivity boost would have added an overall $507 billion to the U.S. economy by 2019.

“The economic inequalities facing Black women continue to compound, particularly as the service sector unemployment rate remains high in the wake of COVID-19,” Dr. Beth Ann Bovino, U.S. chief economist at S&P Global Ratings and lead author of the report, said. “Our report illustrates the real economic impacts of equitable advancement, not just for Black women and their families but for all of us. Making that advancement a reality would require breaking down larger systemic barriers that make it difficult for Black women to succeed in the American labor force.”

In the U.K., two-thirds of Black professionals interviewed for research by the London-based think tank New Financial and sponsored by S&P Global’s Diversity Research Lab said they experienced racism at work—with the majority of incidents being subtle and casual racism and implicit and systemic bias, rather than egregious or violent offenses, that create workplace environments where Black individuals struggle to succeed. Black professionals at leading U.K. financial firms said that striving to fit in, the consequences of the lack of representation of Black people, and not knowing the unwritten rules to get ahead obstructed their advancement.

“What this has is the cumulative effect of creating a hostile working environment, and it creates and perpetuates a workplace where black colleagues struggle to thrive,” Yasmine Chinwala, a partner at New Financial and lead author of the research, told S&P Global’s Essential Podcast. “Having somebody say, ‘Oh, you weren't what I was expecting. You didn't sound Black on the phone.’ Being mistaken for security or catering or maintenance. A conversation being addressed to a more junior white colleague. Being stared at, for example, because there's so few Black colleagues in the office, or being repeatedly confused for another Black colleague because there's only two. Those are some examples of the more everyday racism that the interviews talked about in our research.”

Ms. Chinwala noted that “the murder of George Floyd has really shot the Black-inclusion agenda to the top,” with discussions around racism moving “from that very personal sphere to a professional sphere. Conversations that people were having just at home with their friends, they're having them at work. And the discussion really is moving from taboo to omnipresent.”

Starting the conversation is just the first step toward achieving an equitable economy.

“I think as things have unfolded in the U.S. and elsewhere over the last several hundred years, I think anyone would be foolish to think change is anything other than incremental,” Pierre Davis, S&P Global Platts’s chief legal officer, who participated in the New Financial research, told the Essential Podcast. “But we see a broader effort in society to understand one another better and to also recognize excellence where we see it, including in the Black community. I think we've made an incremental step where we have the ability to make an incremental step. I'm not so blindly optimistic that I would think that all of a sudden, everybody got woke and society's magically going to be completely equal tomorrow. It's just another step along the incremental journey that we've all been on for hundreds of years now.”

Today is Tuesday, June 8, 2021, and here is today’s essential intelligence.

Uncertainty in the Global Economy

Economic Research: U.S. Biweekly Economic Roundup: A Long Way Back to Full Employment

The economy added 559,000 jobs in May, almost the average pace over the previous three months. At this rate, the jobs market will reach its pre-pandemic full employment trend in the first quarter of 2023, but the May pace will be difficult to maintain past summer as the burst of jobs to start in reopenings are the low-hanging fruit.

—Read the full report from S&P Global Ratings

The Credit Cycle

Default, Transition, and Recovery: The 2021 Corporate Default Tally Remains at 43 for the Second Consecutive Week

This year's global corporate default tally remains at 43, with no defaults for the second consecutive week. With less than half the number of defaults compared with this point in 2020, defaults have slowed considerably this year as creditworthiness even at the lower rating levels is stabilizing.

—Read the full report from S&P Global Ratings

May Corporate Bankruptcy Filings Fall to Lowest Monthly Total In Nearly 4 Years

In May, 27 new corporate bankruptcy cases were filed, the lowest monthly total since July 2017. As of May 31, the year-to-date total was 210 cases, a lower figure than all but two of the prior 11 years — 2015 and 2014. Despite the ongoing drop in new bankruptcies so far in 2021, some experts continue to question whether government support and easy access to capital will keep distressed companies out of court or if another spike will soon come.

—Read the full article from S&P Global Market Intelligence

Credit FAQ: How are California's Wildfire Risks Affecting Utility Credit Quality?

The 2020 California wildfire season was one of the more destructive wildfire seasons on record with more than 4 million acres burned and 10,000 structures damaged or destroyed

—Read the full report from S&P Global Ratings

Banking Industry Under Pressure

Mashreq, Rakbank Fall Short of UAE's New Capital Requirements In Q1

Mashreqbank PSC and The National Bank of Ras Al-Khaimah (PSC)'s paid-up capital levels fell below the new minimum requirement set by the central bank of the United Arab Emirates in the first quarter, according to S&P Global Market Intelligence data.

—Read the full article from S&P Global Market Intelligence

UK Banks Bolster Capital, but Fears Linger Over Pace of Recovery, Credit Losses

Britain's leading banks are strongly capitalized and have taken a cautious approach to provisions, but they may yet be tripped up by a slower-than-expected economic recovery, according to analysts. They can also expect significant credit losses in the domestic U.K. market, with S&P Global Ratings predicting the figure for 2021 will be double what it was in 2019, albeit lower than in 2020.

—Read the full article from S&P Global Market Intelligence

Technology & Media

Ten Years of Newsql: Back to the Future of Distributed Relational Databases

451 Research first used the term NewSQL 10 years ago to describe a new breed of relational database players. Little did we know that the term would be picked up by the wider industry to describe a new category of products, triggering numerous marketing campaigns and industry events, its own Wikipedia entry, and dedicated academic research papers. A decade later, it is interesting to look back on that first report to examine the fortunes of the various vendors cited as examples of NewSQL, especially in the context of other trends that have shaped the market, such as NoSQL and database as a service, while looking ahead to see whether NewSQL will continue to be relevant in the next 10 years.

—Read the full article from S&P Global Market Intelligence

ESG in the Time of COVID-19

Asia's Oil Giants Will Be Key to Global Climate Fight

Asia's national oil companies have emission targets that are often more aggressive than national targets, signaling their role in achieving national carbon goals. Asian energy giants are investing in renewable energy, natural gas, carbon capture, electric-vehicle charging and energy storage to advance these goals. A fast transition away from carbon energy may leave these firms with stranded assets and a disrupted business model, which may hit their profits and credit standing.

—Read the full article from S&P Global Market Ratings

Natural Gas In Transition: High-Stakes Battles Over Gas Use Take Shape

This is the first in a multipart series exploring the natural gas industry's role and prospects in the energy transition — a globe-spanning movement to cut greenhouse gas emissions across the energy industry.

—Read the full article from S&P Global Market Intelligence

China's Big 5 Power Producers Face Uphill Battle in Meeting Peak Emissions Targets

China's five largest independent power producers, or IPPs, who account for around 44% of the country's power generation capacity, have set ambitious targets to peak carbon emissions by 2025 or earlier, but face several obstacles in reaching this lofty goal.

—Read the full article from S&P Global Platts

CFTC Gauging Role as Carbon Markets Grow but Still Face Challenges Scaling Up

Despite growth in regional carbon markets and swelling demand for voluntary carbon offsets, there is a need for standardization to help scale up trading and a role for regulators in ensuring market integrity, participants in a US Commodity Futures Trading Commission advisory panel forum said June 3.

—Read the full article from S&P Global Platts

Navigating Climate Risk with Indices

How can indices bring greater transparency to climate risk? Designed to go beyond the requirements of EU Low Carbon Benchmark minimum standards, the S&P Paris-Aligned & Climate Transition Indices were created to help market participants looking to chart a path to net zero by 2050.

—Read the full article from S&P Global Dow Jones Indices

The Future of Energy & Commodities

Watch: Market Movers Europe, June 7-11: Risk on Sentiment In the Crude Oil Complex, Gas Supported

In this week's highlights: Oil prices maintain their bullish trend; a solar eclipse to challenge European power markets; crude oil prices on the rise; tightness in downstream petrochemicals markets persists.

—Watch and share this Market Movers video from S&P Global Platts

China's Independent Refineries Rush to Buy Straight-Run Fuel Oil as Crude Quotas to Fall Short

China's independent refineries rushed to shop at least 210,000 mt of straight-run fuel oil to secure adequate feedstock barrels as they will be short of imported crude oil quotas in the second half of the year, refinery and trade sources told S&P Global Platts June 5-6.

—Read the full article from S&P Global Platts

Listen: Iranian Oil Sanctions Relief Still Expected as Vienna Talks Stretch Into Summer

The US and Iran are entering a sixth round of indirect talks in Vienna aimed at restarting the 2015 nuclear deal. S&P Global Platts Analytics still expects the sides to reach a deal in the coming months, with the Biden administration removing sanctions on Iran's oil, petrochemical, shipping and other sectors by September. This sanctions relief would allow Iran to boost crude and condensate exports to 1.5 million b/d by December, from 600,000 b/d in May. We spoke with Henry Rome, senior analyst at the Eurasia Group, about the main sticking points to reaching a deal. He also walks through some of the domestic political dynamics in Tehran and Washington and gives his prediction for when higher Iranian oil exports will start to flow. Stick around after the interview for the Market Minute, a look at near-term oil market drivers.

—Listen and subscribe to Capitol Crude, a podcast from S&P Global Platts

Written and compiled by Molly Mintz.