20160407-穆迪服务-Wide_Spreads_Likely_until_the_Next_Upturn_27页_577kb

Moody's Weekly Market Outlook Summary

Core Content

Moody's Weekly Market Outlook provides a detailed analysis of credit markets, economic indicators, and sector-specific credit rating outlooks. The report highlights the current state of credit spreads, default rates, bond issuance trends, and the broader implications for the global economy and corporate credit quality.

Main Views

1. Credit Spreads and Market Outlook

• Credit Spreads: Credit spreads are expected to remain wide until the next economic upturn.
  • Investment Grade (IG) spreads are projected to reach around 153 bp by year-end 2016.
  • High Yield (HY) spreads are forecast to approach 680 bp by year-end 2016, up from 710 bp in March 2016.
• Default Rates: The US HY default rate is expected to rise from 3.6% in February 2016 to 5.5% by January 2017.
• Bond Issuance:
  • US$-denominated IG bond issuance is expected to increase by 8.1% to $1.434 trillion in 2016.
  • US$-priced HY bond issuance is projected to decline by 13.6% to $310 billion in 2016.
• Credit Quality Trends: The share of HY bonds rated Caa or lower has risen to 22.0% as of Q1-2016, indicating a deterioration in credit quality. This trend is expected to continue unless there is a significant improvement in corporate profits.

2. Global Credit Outlook

• Divergent Outlooks: Global credit markets show divergent outlooks, with many sectors facing negative credit rating expectations.
• Negative Outlook Sectors:
  • Base Metals (Global)
  • Chemicals (North America, Europe, Middle East & Africa)
  • Coal (United States)
  • Exploration and Production (Global)
  • Integrated Oil (Global)
  • Manufacturing (Europe, Middle East & Africa)
  • Manufacturing (North America)
  • Newspapers & Magazines (United States)
  • Oilfield Services and Drilling (Global)
  • Shipping (Global)
  • Steel (Asia)
  • Steel (Europe, Middle East & Africa)
  • Steel (United States)
• Positive Outlook Sectors:
  • Aerospace and Defense (Global)
  • Airlines (Global)
  • Automotive Parts Suppliers (Europe, Middle East & Africa)
  • Building Materials (North America)
  • Homebuilding (United States)
  • Retail (United States)
  • Solid Waste (North America)

3. Economic Indicators and Market Conditions

• Labor Market Conditions Index: The index fell to -2.2 points in Q1-2016, signaling a weak job market. This is the lowest level since the -2.5 points of February 2010.
• Consumer Spending: US consumer spending may be overstated. Auto sales declined by 5.6% in March, which could lead to a third consecutive monthly decline in retail sales.
• ISM Indices: The ISM Manufacturing Index and Non-Manufacturing Index show signs of growth, which could moderate the slide in corporate credit quality. However, the current credit spread is higher than what the ISM indices predict, indicating a lag in market response.
• Dollar Weakness: A weaker dollar can help reduce the export drag on US corporate profits, improving the outlook for business investment and overseas earnings.

4. Regional Outlooks

• United States:

  • Import Price Index (March): Expected to rise by 1.0% due to relief from the global commodities rout.
  • Retail Sales (March): Forecast at 0.2% overall, with 0.4% ex auto, reflecting weak auto sales.
  • Producer Price Index (March): Expected to rise by 0.2% overall and 0.1% core, driven by higher fuel costs.
  • Business Inventories (February): Forecast to remain flat, reflecting high stockpiles relative to sales.
  • Consumer Price Index (March): Expected to rise by 0.4% y/y, with energy prices continuing to drag.
  • Producer Price Index (March): Projected to fall by 1% y/y, driven by persistently low energy prices.

• Europe:

  • Euro Zone Inflation: Remains in negative territory, with disinflation pressures abating slightly.
  • Germany:
    • Industrial Production (February): Likely to rise by 0.2% m/m.
    • Consumer Price Index (March): Expected to increase by 0.3% y/y.
  • France:
    • Industrial Production (February): Likely to rise by 0.2% m/m.
    • Fiscal Balance (February): Expected to show a deficit of -€21.2 billion.
  • United Kingdom:
    • Industrial Production (February): Projected to increase by 0.1% m/m.
    • Consumer Price Index (March): Forecast at 0.4% y/y.
    • Producer Price Index (March): Expected to fall by 1% y/y.
  • Italy:
    • Industrial Production (February): Likely to decline by 0.3% m/m, reversing January's 1.9% gain.
  • OECD Composite Leading Indicators (February): Forecast at 99.6, showing little change from the previous month.

Key Information

• The current business cycle upturn is characterized by weak confidence in profit outlooks, leading to wide credit spreads and a higher proportion of low-rated bonds.
• A recession is needed to form a definitive cycle peak for default rates and to encourage more conservative financial management.
• The labor market conditions index suggests that the US job market is weak, with a three-month average of -2.2 points.
• The ISM indices indicate a more optimistic outlook for business activity, but this has not translated into lower credit spreads yet.
• The US dollar's weakness is expected to improve corporate profits and business investment, especially in export-oriented industries.
• The global economy is facing divergent credit rating outlooks, with many sectors in distress and others showing potential for growth.