Bonds & Credit Markets
Rating agency Moody’s warns of rising corporate defaults (from The Financial Times)…
Global corporate defaults surged in December, according to a report by rating agency Moody’s, setting the stage for more missed debt payments ahead as low-grade, highly leveraged businesses grapple with a prolonged period of steep funding costs. Twenty companies rated by Moody’s defaulted on their debt last month, up from four in November, lifting the
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Ten key takeaways on the credit markets today (from Oaktree Capital Management)…
In December 2023, Oaktree’s incoming co-CEOs Armen Panossian (Head of Performing Credit) and Bob O’Leary (Portfolio Manager, Global Opportunities) took part in a webcast for Oaktree clients that explored the state of performing and opportunistic credit markets and what we might expect to see moving forward. They argued that the current environment for credit investors
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U.S. corporate bond markets are “on fire” to start 2024 (from Jesse Felder via X)…
Companies have sold a record $150bn of debt since the start of this month, the busiest opening to the year for more than three decades.
What is the impact of the recent Fed pivot on consumers? (from The Daily Spark)…
Data covering the period after the Fed pivot shows that US consumers significantly changed their expectations to interest rates after the December FOMC meeting. Specifically, the share of consumers expecting interest rates to go down jumped to levels last seen during the pandemic and during the financial crisis in 2008, see chart below. With almost
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U.S. consumer credit surpassed $5 trillion for the first time in November (from MarketWatch)…
The numbers: Total consumer credit rose $23.7 billion in November, up from a $5.8 billion increase in the prior month, the Federal Reserve said Monday. That translates into a 5.7% annual rate, up from a revised 1.4% rise in the prior month. That was the biggest gain since November 2022, and puts total consumer credit
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Discover Financial Services could be a canary in the coal mine for the consumer credit markets (from Barron’s)…
Discover Financial Services stock tumbled 8% in early trading Thursday after the company missed earnings estimates and set aside more money to cover bad loans. Discover said its provision for credit losses was $1.9 billion in the fourth quarter, an increase of $1 billion from the previous year. The increase included a $305 million higher
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The buy now, pay later “holiday hangover” has arrived (from CNBC)…
When she started shopping for the holidays late last year, Kelly Andersen was struggling to buy her loved ones gifts. So she turned to a novel solution to get through the season: Buy now, pay later. The 31-year-old freelance copywriter from Los Angeles used Klarna and PayPal to split a variety of purchases into four
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Stanley Druckenmiller made a “massive” bullish bet on two-year Treasury notes this month (from Bloomberg)…
Billionaire investor Stan Druckenmiller said he’s bought “massive” bullish positions in two-year notes, as he’s become more worried about the economy. In recent weeks, “I started to get really nervous,” Druckenmiller, founder of Duquesne Family Office, said in an interview with hedge fund manager Paul Tudor Jones at a conference last week. “So I bought
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