David Daglio, the former chief investment officer of Mellon Investments, is on a $250 million fund-raising drive to power his new bearish investment fund that’s going all-in on credit market stress. The veteran reckons an oncoming US recession will spark a fresh wave of corporate downgrades and debt defaults, with risk premiums for investment-grade firms
The prospect of higher-for-longer interest rates ratchets up the risk that a sharp spike in debt maturities in 2024 and 2025 will have to be refinanced at much higher costs, raising the potential for defaults. Some $106.7 billion of speculative-grade nonfinancial debt matures in 2023, according to S&P Global Ratings. That more than doubles to
Households still have plenty of excess savings left, see chart below. That is the reason why consumer spending remains so strong, in particular consumer spending on services such as airlines, hotels, restaurants, etc. Source: Bloomberg, Apollo Chief Economist
Based on recent reports from many of the consumer companies we follow, we agree with Walmart—the consumer is under a lot of stress. Even with unemployment near record lows, the average consumer is having trouble affording tires, shoes, apparel, and other goods. The main culprit, accumulated inflation, is crushing middle to lower-income consumers. Meanwhile, high-end
Citizens Financial Group, Inc. (NYSE: CFG) today announced that it will no longer originate indirect auto loans, effective July 1, 2023, as part of its strategy to optimize its balance sheet and emphasize relationship-based lending. Citizens will retain and continue to service existing auto loans on its balance sheet. “As Citizens continues to optimize its
More than three years after a moratorium on student loan repayments was enacted by the federal government, borrowers are now staring down a rapidly approaching end to the pause. New rules passed as part of the recent debt ceiling legislation dictate that the Biden administration cannot extend the pause again, and so payments are now
Consumer Credit numbers from the Fed, chart by Mish. Consumer Credit numbers for April are from the Fed’s G.19 Consumer Credit report. Nominal Growth Synopsis Nonrevolving Government Credit (student loans) is best viewed as essentially unchanged for three months. Revolving Consumer Credit in Billions of Dollars Consumer Credit numbers from the Fed, calculation and chart