S&P Capital IQ Spotlights Biggest ‘Sector Disruptors’ of 2016
Dividend cuts in Energy, mobile phone leasing programs, growth of Blockchain, and divergent monetary policies in U.S. and Europe are flagged as potential catalysts to move markets
S&P Capital IQ and SNL, a business unit of McGraw Hill Financial (NYSE:MHFI) and a leading provider of research, analytics and data, released its annual analysis of emerging issues to watch: Sector Disruptors: 2016 Winners And Losers. The report spotlights what are seen as the most disruptive new technologies, legislative and regulatory issues, and changing patterns of consumer behavior, and weighs their potential impacts on each sector of the S&P 500 and international markets.
Addressing all ten sectors of the S&P 500, the Sector Disruptors report identifies potential sector winners and losers based on whether companies can adapt to new marketplace changes. Having successfully anticipated many of the market-moving events of 2015 – including the impact of falling energy and commodity prices, increased adoption of video streaming services, and emergence of wearable consumer technologies – the Sector Disruptors report tackles a new line-up of issues for the year-ahead.
Following are some of the key observations:
- Possible Dividend Cuts from Larger Energy Companies: With its announced dividend cut in January, Noble Energy became among the first of what is likely to become a number of larger U.S. petroleum producers that will slash 2016 dividends in order to combat the effects of stubbornly poor crude oil prices. Those who survive the year with their dividends intact will likely be those with low payout ratios and either modest free cash flow deficits (or surpluses), enabling them to ride out a period of low prices.
- Mobile Phone Consumer Leasing Programs Take Root in Telecom: 2015 officially marked the end of the two-year mobile phone contract. In its place, leasing options are already starting to generate interest from U.S. consumers. Those most likely to benefit will be mobile service providers who already have viable leasing programs in place to capitalize on the trend.
- The Emergence of Blockchain in Financial Services: Large financial firms have just started taking Blockchain seriously as an emerging technology that has the potential to revolutionize the speed and accuracy of asset valuation, recording and trading. Those most likely to benefit will be those that realize the greatest efficiency gains from the new technology.
- Divergent Monetary Policies in U.S. and Europe: While the European Central Bank (ECB) recently signaled it would further trim interest rates and expand monetary stimulus, the U.S. Federal Reserve has decided to raise its interest rates for the first time since 2006. The resultant weakening of the Euro against the U.S. dollar should provide a valuable boost to exporters in Europe.
“We’re living through an unprecedented era of rapid change in which a single, breakthrough piece of technology or the stroke of a regulator’s pen can have far-reaching and meaningful impact on today’s industry leaders,” said Michael Thompson, Chairman, S&P Investment Advisory Services. “By looking across the major U.S., European, and Asian stock indices through the lens of marketplace disruption, we believe we are shedding valuable light on the major trends that will impact financial markets over the next year.”
The S&P Capital IQ Sector Disruptors: 2016 Winners And Losers addresses each sector of the S&P 500, along with spotlights on Europe and Asia, and is available. To access the full research note, please click here.
About S&P Capital IQ and SNL
S&P Capital IQ and SNL Financial, a business unit of McGraw Hill Financial (NYSE:MHFI), is a leading provider of financial and industry data, research, news and analytics to investment professionals, government agencies, corporations, and universities worldwide. The newly combined firm integrates news, comprehensive market and sector-specific data and analytics into a variety of tools to help track performance, generate alpha, identify investment ideas, understand competitive and industry dynamics, perform valuation and assess credit risk. For more information, visit www.spcapitaliq.com or www.snl.com.
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