U.S. Corporate Debt Market under Pressure

This high level of corporate debt has made the U.S, particularly vulnerable to sharp downturns in global economic activity. Source: S&P Global Since mid-February, the market has turned sharply down in response to the coronavirus pandemic. The S&P 500® has fallen about 32% from its peak this year. Equity volatility shot up, as VIX® went…

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The coronavirus fightback will make lasting changes to economies

The spectre of a solvency crisis for the broader economy has jolted central banks and governments into action. Source: Financial Times In the fight to stop the coronavirus outbreak destabilising the global economy, central banks have gone “all in” with intervention after intervention to calm capital markets. Governments are following closely behind, announcing massive spending…

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Will the coronavirus trigger a corporate debt crisis?

The COVID-19 crisis could trigger a sudden and massive reassessment of corporate credit risk, extending beyond the oil and gas sector where stress has thus far been most visible. Source: LA Times As Ryman Hospitality Properties built a hospitality and entertainment empire around the original Nashville radio show, the parent company’s debt grew to more…

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The U.S. Economy Is Now in Uncharted Waters

Just how bad COVID-19 will ultimately be for the US and global economy is difficult to say, with no real frames of reference as precedent – the author discusses two extreme scenarios as a framework for what may be. Source: Bloomberg How bad COVID-19 will be for the U.S. economy is almost impossible to say,…

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JPMorgan Analysts Say Work-From-Home May Hit Funding Markets

Apart from the market risk ramifications of COVID-19, the fact that we are also in the early stages of a large-scale operational-risk episode, including the negative impact on liquidity of traders working from home. Source: Bloomberg via GARP (Bloomberg) — The impact of the coronavirus outbreak on Wall Street may worsen trading conditions for one…

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Global Credit Market Seizes Up as Coronavirus Halts Bond Sales

Global corporate bond market door slammed shut on Coronavirus fears and uncertainty. Source: Yahoo Finance (Bloomberg) — The global credit machine is grinding to a halt. The $2.6 trillion international bond market, where the world’s biggest companies raise money to fund everything from acquisitions to factory upgrades, came to a virtual standstill as the coronavirus…

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Quality of corporate debt falls as bond stocks hit all-time high – OECD

The OECD warns of lower overall credit quality in the current stock of outstanding corporate bonds, with higher payback requirements, longer maturities and inferior covenant protection compared to other credit cycles. Source: Nasdaq PARIS, Feb 18 (Reuters) – The build-up of corporate bonds has hit unprecedented levels since the 2008 financial crisis and created a…

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AI has started a financial revolution

In the next decade, Fintechs anticipate AI will have expanded their workforce by 19%. Source: World Economic Forum Artificial intelligence (AI) is in the process of transforming a variety of models in the global financial services industry, a global survey jointly conducted by the Cambridge Centre for Alternative Finance (CCAF) at the University of Cambridge…

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How Strategists and Investors See Coronavirus Playing Out

Economists and investment strategists are pretty much in line with respect to intensifying Coronavirus risks over the short term, with however less uniformity of view in terms of the medium term ramifications for the global economy. Source: Bloomberg via GARP (Bloomberg) — A raft of new coronavirus cases in numerous countries outside China over the…

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