Business Insights

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Weekly Market Outlook: Likelihood of a 1.88% Fed Funds Rate by End of July Soars

The release of second quarter corporate earnings is moving into full gear and investors are not entirely happy with the results.

July 2019
John Lonski,  Yukyung ChoiKatrina EllSteven Cochrane, Barbara Teixeira Araujo, Michael Ferlez,  Ryan Sweet

Article
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Weekly Market Outlook: Market Implied Ratings Differ on the Likely Direction of Baa3 Ratings

Baa3-grade issuers constitute the bottom rung of the investment-grade ratings ladder. Once a Baa3 rating is subject to a “fallen angel” downgrade to speculative-grade, investors who are mandated to hold only investment-grade obligations must sell the now high-yield debt.

July 2019
John Lonski,  Yukyung ChoiKatrina Ell, Barbara Teixeira Araujo,  Ryan Sweet, Steven Shields

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Weekly Market Outlook-Below-Trend Spreads Bank on Profits Growth, Lower Rates and Healthy Equities

Sequential declines by the Bureau of Economic Analysis' quarterly estimate of nonfinancial-corporate profits from current production, or core pretax profits, often reveal little about the current or future states of the business and credit cycles.

June 2019
John Lonski,  Yukyung ChoiKatrina Ell, Barbara Teixeira Araujo,  Ryan Sweet, Michael Ferlez

Article
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Weekly Market Outlook: Global Collapse by Bond Yields Stems From Worldwide Slowdown

Both the corporate bond and equity markets responded positively to the latest drop by Treasury bond yields and the likelihood of at least two reductions of the federal funds rate during the remainder of 2019.

June 2019
John Lonski,  Yukyung ChoiKatrina Ell, Barbara Teixeira Araujo,  Mark ZandiRyan Sweet, Steven Shields

Article
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Weekly Market Outlook: Borrowing Restraint Likely Despite Lower Interest Rates

According to the Federal Reserve's “Financial Accounts of the United States”, first-quarter 2019's outstanding debt of U.S. nonfinancial corporations advanced by 8.1% year-over-year to a new record high of $9.926 trillion.

June 2019
John Lonski,  Yukyung ChoiKatrina Ell, Brendan Meighan, Steven Shields

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Weekly Market Outlook: The Fed Cured 1998's Yield Curve Inversion

The implied probability of a fed funds rate cut at the Federal Open Market Committee's July 31 meeting recently soared to 72% mostly in response to Jerome Powell's apparent willingness to heed the recessionary warning of a possibly persistently inverted yield curve.

June 2019
John Lonski,  Yukyung ChoiKatrina Ell, Barbara Teixeira Araujo,  Ryan Sweet, Michael Ferlez

Article
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Weekly Market Outlook: Extended Yield Curve Inversion Would Presage Wide Spreads and Many Defaults

Since May 3, or just prior to the latest episode of trade-related stress, the market value of U.S. common stock had plunged by 5.7% as of May 29's close for a paper loss of $1.735 trillion.

May 2019
John Lonski,  Yukyung ChoiKatrina Ell, Faraz Syed, Barbara Teixeira Araujo,  Ryan Sweet, Michael Ferlez

Article
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Weekly Market Outlook: Business Debt's Mild Rise Differs Drastically from 2002-2007's Mortgage Surge

Fed Chairman Jerome Powell recently addressed the issue of business borrowing. In a May 20 speech, Mr. Powell suggested that, by itself, the new record high ratio of nonfinancial-corporate business debt to GDP is much less of a risk to systemic financial liquidity than was home mortgage debt's record high 100% of disposable personal income from 2007.

May 2019
John Lonski,  Yukyung ChoiKatrina Ell, Barbara Teixeira Araujo,  Ryan Sweet, Steven Shields

Article
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Weekly Market Outlook: Earnings Slump Would Unmask Dangers of High Leverage

According to the Federal Reserve's “Financial Stability Report” of May 2019, not only has the outstanding debt of nonfinancial businesses outpaced nominal GDP during the past 10 years (or since 2008), but the growth of debt has been skewed toward riskier firms.

May 2019
John Lonski,  Yukyung ChoiKatrina Ell, Barbara Teixeira Araujo,  Mark ZandiRyan Sweet, Michael Ferlez

Whitepaper
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Chartis Research | Moody's Analytics Model Validation Vendor Analysis Report

Moody's Analytics is named a Category Leader in this report that assesses 10 leading vendors of model validation solutions and is recognized for offering best-in-class capabilities in all seven categories, including data, input, model analytics/pricing, and suitability.

May 2019

Whitepaper
landing-architecture-futuristic

Chartis Research | Moody's Analytics Model Validation Vendor Analysis Report

Moody's Analytics is named a Category Leader in this report that assesses 10 leading vendors of model validation solutions and is recognized for offering best-in-class capabilities in all seven categories, including data, input, model analytics/pricing, and suitability.

May 2019

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Weekly Market Outlook: Credit May Again Outshine Equities at Divining Markets' Near-Term Path

During a week of heightened equity market volatility, the corporate credit market was relatively calm. As of May 8's close, the credit market had yet to sense much collateral damage from an intensification of the trade conflict between China and the U.S.

May 2019
John Lonski,  Yukyung ChoiKatrina EllSteven Cochrane, Barbara Teixeira Araujo,  Ryan Sweet, Steven Shields