In this webinar, we will use Moody’s Analytics EDF metrics to assess the impact COVID-19 has had so far on corporate credit risk.
We highlight company-, industry-, and country-level dimensions, including both risks and opportunities. In terms of investment ideas, we show that low default risk bonds, and the stocks of low default risk firms, have strongly outperformed during the international phase of the pandemic, consistent with a “flight to credit quality”. Finally, we examine the effects of a pandemic macroeconomic scenario to show which countries and industries could be most at risk going forward.
- Sam Malone PhD, Senior Director-Research
- Glenn Levine, Director-Research
- Yukyung Choi, Associate Director-Senior Research Analyst
- Ryan Donahue, Assistant Director-Product Strategist
The market value of U.S. common stock now approaches its February 19, 2020 zenith amid the sense that the U.S. is learning to better cope with its COVID-19 handicap.
As repeated many times by Fed Chairman Jerome Powell, COVID-19 is now the driving force behind U.S. business activity.
The incredible rally in corporate credit continues. On Wednesday, the Bloomberg/Barclays corporate bond yields fell to a record low of 1.90% for investment-grade and a non-recessionary 5.55% for high yield.
June's retail sales showed an economy on the mend.
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.