Since the Asia crisis, most countries in Asia have displayed a longer term secular trend of falling default risk.
In the last twelve months, however, we have seen a significant uptick in equity market volatility in both the US and China, the world’s two largest economies by GDP. Rising credit risk is also apparent from these and other developments in both countries. A key question for investors is whether firms with lower levels of credit risk are likely to outperform during the next turn in the credit cycle.
In this 1-hour webinar, our experts present research showing that firms with high credit quality risk and high default risk have tended, on average, to systematically underperform their peers in multiple equity and bond markets spanning the US and Asia. We discuss the impact of shifting yield curves on CreditEdge factor-based strategies as well, and highlight the role of credit risk signals for early warning at the sector level.
- Sam Malone, Director of CreditEdge Research
- Yuki Choi, Associate Director
Questions? Email: MA-Webinars@moodys.com
Recent equity market volatility stems from shifting views regarding whether current and future upturns by COVID-19 will prove manageable.
Even without COVID-19, long-term prospects for U.S. economic growth fell considerably short of what held during the second half of the 20th century.
More than anything else, the unknown course of COVID-19 remains the biggest threat to the business outlook.
According to a consensus estimate compiled by FactSet, the composite earnings per share (EPS) of the S&P 500's member companies is likely to plunge by 43% year-to-year.
Ongoing rallies by both the equity and corporate bond markets assume that any forthcoming rise by financial distress among businesses, households, as well as state and local governments, will be manageable.
As inferred from May-to-date's average 2.56-million initial state jobless claims per week, another outsized shrinkage of payrolls is likely following the loss of 881,000 jobs in March and the mind-boggling disappearance of 20.54-million jobs in April.
Across all rating categories, the recent $7.830 trillion of nonfinancial-corporate debt of North American nonfinancial companies rated by Moody's Investors Service was divided among $5.994 trillion of outstanding corporate bonds, $1.392 trillion of outstanding loans, and $444 billion of revolving credit facilities.
Expectations of an unfolding upswing by business activity from a miserable April have lifted financial markets.
In March 2020, the issuance of US$-denominated investment-grade (IG) corporate bonds soared to a record $268 billion, which far surpassed January 2017's erstwhile zenith of $193 billion.
En este seminario web, utilizaremos las métricas EDF de Moody’s Analytics para evaluar el impacto que COVID-19 ha tenido hasta ahora en el riesgo de crédito.