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Moody's Analytics Insights

Article
insight default image

Canada Housing Market Outlook: Time for Slower Price Growth

The housing market in Canada seems to have stabilized. House price growth slowed between early last year and the middle of this year, though home sales and house price growth increased in July and August.

October 2018
Andres Carbacho-Burgos

Article
Graphic blue house in a line of white houses

Canada Housing Market Outlook: A Better Long-Term Perspective

Canada's housing market has moved past its previous turning point and seems to have settled into an interlude of slowing house price appreciation, reduced sales, and a looser market in general.

June 2018
Andres Carbacho-Burgos

Whitepaper
illuminated charts

Default Risk Premium in the Equity Market

This paper explores the default risk premium within the equity market. To our knowledge, this is the first study that uses the commercially-available structural model, Moody's Analytics Public Firm Model, EDF9TM, to explain the cross-section of stock returns. While distressed stocks have attracted attention in the past for their anomalously low returns, we also identify outperformance of “safe” stocks. The notions of safe and distressed are both defined in the context of Distance-to-Default within the Moody's Analytics Public Firm Model(also known as KMV). Our findings revisit the notion that value, size, and momentum price the financial distress risk. We find that safe stocks outperform the market, and risky stocks significantly anomaly, our factor is not a proxy for the low volatility factor.

April 2018
Houman Dehghan, Pooya Nazeran

Article
Financial data on monitor

Weekly Market Outlook: Debt-to-Profits Outperforms Debt-to-GDP

In 2017's final quarter, the 7.7% yearly advance by nonfinancial-corporate profits from current production outran the accompanying 6.6% increase of nonfinancial-corporate debt. The record shows that if pretax operating profits continue to outpace corporate debt, corporate credit quality will improve. The correlation between the high-yield default rate's quarter-long average and the yearlong ratio of debt-tooperating profits for US nonfinancial corporations is a meaningful 0.82.

March 2018
John Lonski, Franklin Kim, Yukyung Choi,  Ryan Sweet, Kathryn Asher, Michael Ferlez, Thomas Nichols, Barbara Teixeira Araujo, Katrina Ell

Article
Figure 1: Forthcoming Acceleration by US Government Debt May Be Offset By Below-Trend
Growth of Non-Federal Debt

Weekly Market Outlook: Borrowing Restraint Elsewhere Makes Room for Federal Debt Surge

Partly as a means of offsetting the loss of business activity to deleveraging by households, businesses, as well as state and local governments, the federal government's share of the U.S.' broadest estimate of public and private nonfinancial-sector debt has soared from year-end 2007's 18% to the 34% of 2017's third quarter. The latter share is the highest since 1960's third quarter.

February 2018
John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi,  Ryan Sweet, Barbara Teixeira Araujo, Reka Sulyok, Katrina Ell, Faraz Syed

Article
Figure 3: Core PCE Price Index Inflation's Trend Moves in Direction Taken by the Personal Savings Rate

Weekly Market Outlook: Corporate Bonds Beg to Differ With Their Equity Brethren

Thus far, the corporate credit market has been relatively steady amid equity market turmoil. Corporate credit's comparative calm stems from expectations of continued profit growth that underpins a still likely slide by the high-yield default rate. The record shows that 90% of the year-to-year declines by the default rate were joined by year-to-year growth for the market value of U.S. common stock.

February 2018
John Lonski, Njundu Sanneh, Franklin Kim, Yukyung Choi,  Ryan Sweet, Barbara Teixeira Araujo, Reka Sulyok, Katrina Ell, Faraz Syed

Article
sketches of sedans, SUVs

Wholesale Used-Car Price Report December 2017

Wholesale used-vehicle auction sales waned in November, while the average transaction price fell by 0.53% from a year ago to $10,556. The surge in replacement demand after Hurricanes Harvey and Irma appears to be fading, resulting in prices and sales normalizing from the strong performance in October and September.

December 2017
Michael Vogan, Roland Lindmayer

Presentation
Average price-to-MSRP ratio by fuel type, by sale age in years

Electric Vehicle Residual Value Outlook

Moody's Analytics Lead Auto Economist Michael Vogan examine what factors—both macroeconomic and technological—are causing residuals in the electric vehicle market to under perform.

December 2017

Article
Pencil sketch of car

Auto Finance Insights - October 2017

Auto lending growth continues to slow. Despite higher pay and solid returns from equity markets, consumers are finding that new cars are losing luster as objects worth their hard-earned cash. The tightening of lending standards has obvious ramifications for the auto industry as a whole, where expansionary credit cycles typically support new vehicle sales.

October 2017

Article
Red house in a group of white houses

Canada Housing Market Outlook: Stepping on the Brake

Canada's housing market is starting to feel the effects of federal and provincial government restrictions, and now the Bank of Canada has also started its long-awaited tightening of interest rates

September 2017
Andres Carbacho-Burgos

Presentation
Auto origination volme by Vantage Score

Subprime Auto Credit: Navigating Risks on the Horizon Presentation Slides

In this presentation; Auto lending is following a natural and expected credit cycle. Subprime performance will get better as credit tightens. Nonbank auto financiers are facing the highest loss rates when lending to low-income, subprime borrowers. Residual value pressures should begin to abate but will likely increase for trucks and SUVs.

August 2017

Webinar-on-Demand
Business and financial report

Subprime Auto Credit: Navigating Risks on the Horizon

Auto lending is following a natural and expected credit cycle. Subprime performance will get better as credit tightens. Nonbank auto financiers are facing the highest loss rates when lending to low-income, subprime borrowers. Residual value pressures should begin to abate but will likely increase for trucks and SUVs.

August 2017