what is standard poor s s p 
standard poor s s p is a company well known around the world as a creator of financial market indices widely used as investment benchmarks a data source and an issuer of credit ratings for companies and debt obligations it s perhaps best known for the popular and often cited s p 500 index the company s roots date back to the 1860s since 2016 its official corporate name has been s p global 1understanding standard poor s s p standard poor s grew out of two companies poor s publishing a publisher of railroad industry guidebooks officially founded in 1868 and the standard statistics bureau later company founded in 1906 which published financial data on companies in 1923 it released its first stock market indicator which contained 233 companies poor s publishing meanwhile issued its first rating in 1916 the two firms merged in 1941 to create standard poor s 2the mcgraw hill cos purchased s p in 1966 in 2012 standard poor s combined its index operations with dow jones indices which mcgraw hill owned to become the leader in stock market indexes in 2016 mcgraw hill financial rebranded itself as s p global s p global divisions include s p global ratings s p global market intelligence s p dow jones indices and s p global platts 2 the company has more than 1 500 credit analysts and more than 1 million credit ratings have been issued on governments corporations the financial sector and securities 6s p is a major credit risk researcher covering multiple industries benchmarks asset classes and geographies it issues credit ratings ranging from aaa to d on public and private company debt as well as governments it also offers ratings on short term debt and provides outlook ratings that range from six months to two years 65s p s major competitors for credit ratings include moody s and fitch and for financial indices bloomberg general business services 78standard poor s indexesthe s p 500 index launched in march 1957 it was the first index to be computer generated and to be published daily and has become a stand in for the u s stock market itself 2the s p 500 index contains 500 of the largest stocks that trade on the new york stock exchange nyse and nasdaq making it a tool to gauge the overall health of large american companies the s p 500 is probably the single most popular equity index in the world and is used as a performance benchmark for a variety of mutual funds etfs and other assets and securities other popular indexes offered by s p global cover different sectors of the market and different market capitalizations large offerings from s p dow jones indices include the s p smallcap 600 the s p midcap 400 the s p composite 1500 and the s p 900 each represents a look at market health based on its sub sector 9s p 500 index futuresthe first s p 500 futures contracts were introduced by the chicago mercantile exchange cme in 1982 and carried a notional value of 250 times the value of the s p 500 the cme added the e mini contract valued at 50 times the s p 500 in 1997 to allow for smaller investments by a wider range of investors 10 the even smaller micro e mini with a multiplier of just 5 was introduced in 2019 11the e in e mini stands for electronic a reflection of the fact that when e minis were launched in 1997 they traded exclusively on cme globex cme s electronic trading system rather than in open outcry pits like other futures contracts 10 many traders favored the e mini over the standard contract not only for its smaller investment size but also for its liquidity consequently cme delisted the standard contract in september 2021 12as with all futures investors are only required to front a fraction of the contract value to take a position this represents the margin on the futures contract these margins are not the same as margins for stock trading futures margins show skin in the game that must be offset or settled standard poor s underlying ratings spurs standard poor s underlying ratings spurs provide an opinion on a municipality s credit quality separate from guarantor or insurer credit enhancements municipal or other public sector bonds typically include credit enhancement which is used to obtain better terms by providing increased assurance that the borrower will honor its obligation through additional insurance or a third party guarantee standard poor s issues a spurs rating only at the request of the issuer obligor and maintains surveillance of an issue with a published spur 13example of standard poor s ratingsstandard poor s global ratings division ranks debt instruments like bonds and the companies that issue them in terms of creditworthiness defined as the likelihood of default or inability to pay debts in a timely manner similar to academic grades each rating consists of a letter on a scale of a to d sometimes augmented with a plus or minus sign or a number the higher the grade the lower the risk in s p s estimation a rating of bbb and above is called investment grade the safest sort of investment ratings below that are considered speculative a greater degree of risk the chart below displays standard poor s rating system for short term debt bills loans and other obligations with a maturity of one year or less 14 these are the sort of instruments that money market funds and money market accounts often invest in 