20160128-穆迪服务-Credit_Steadies,But_It_s_Too_Early_to_Call_a_Bottom_30页_726kb

Moody's Weekly Market Outlook Summary

Core Content

Moody's Weekly Market Outlook provides an analysis of the current state of credit markets, highlighting that while credit conditions have steadied, it is too early to declare a bottom in the market. The report is authored by a team of economists from Moody's Capital Markets Research, Inc., including John Lonski, David W. Munves, Ben Garber, Njundu Sanneh, Yukyung Choi, Irina Baron, Franklin Kim, and Xian (Peter) Li. Additional contributors are provided for Moody's Analytics in Europe and Asia-Pacific.

Main Points

Credit Market Trends

• US High-Yield Bond Spread: The spread has narrowed from a January 2016 peak of 844 bp to 795 bp, but still indicates elevated default risk.
• Credit Quality: Improved credit quality is expected to require a return of profits growth in 2016, which has been weak in 2015.
• Profit Outlook: The difference between corporate gross value added and private-sector wage-and-salary income shows a strong correlation with pretax profits, suggesting a worsened profits outlook due to the current imbalance.
• Labor Costs: Tightening US labor markets are putting upward pressure on labor costs, which could hinder corporate profits and pricing power.
• Demographics: An aging workforce and population are expected to increase personal savings, potentially slowing household expenditures and business sales.

Federal Reserve and Inflation

• Fed Policy: The Federal Reserve is poised to raise interest rates again in March, but faces challenges due to weak inflation expectations and a corporate credit crunch.
• Inflation Expectations: Market-derived inflation expectations are near six-year lows at 1.61%, and core PCE Price Index growth has been below 1.5% since October 2014.
• Benchmark Rates: Recent declines in Treasury yields suggest a lower likelihood of further rate hikes, which could ease mortgage rates and support housing recovery.

Corporate Credit and Issuance

• High-Yield Bond Issuance: US high-yield bond issuance dropped by -15.0% in 2015 and is expected to decline further by -18.4% in 2016.
• Investment-Grade Bond Issuance: US investment-grade bond offerings increased by 17.5% in 2015 and are projected to rise by 1.5% in 2016.
• Defaults: The US high-yield default rate is forecasted to rise from 3.2% in December 2015 to 4.2% by November 2016.

The Week Ahead

US Reports

• GDP - Fourth Quarter (Advance Estimate): Forecast at 0.8%, likely to disappoint due to weak consumer spending, business inventories, and exports.
• University of Michigan Consumer Sentiment – January Final: Forecast at 93.0, indicating continued optimism despite recent market turbulence.
• Personal Income & Spending - December: Forecast at 0.2% income growth and 0.1% spending growth, with weak retail sales and average hourly earnings.
• ISM Manufacturing Index – January: Forecast at 48.5, suggesting continued weakness in manufacturing due to global growth concerns.
• Construction Spending - December: Forecast at 0.5% growth, with potential for expansion as the economy recovers.
• Vehicle Sales – January: Forecast at 17.5 million, showing signs of recovery after a six-month low in December.
• ISM Non-Manufacturing Index – January: Forecast at 55.3, indicating strong service sector activity.
• Productivity & Unit Labor Costs – Fourth Quarter Preliminary: Forecast at -1.7% productivity and 4.3% unit labor costs, highlighting the challenge of growth with limited output.
• Factory Orders – December: Forecast at 0.0%, indicating a flat to negative trend in industrial orders.
• Employment Report – January: Forecast at 200,000 nonfarm payrolls and 5.0% unemployment rate, with a strong labor force expansion.
• Trade Balance – December: Forecast at -€42.0 billion, reflecting a significant drop in US exports.

Europe Reports

• France - GDP - 2015Q4: Forecast at 0.2% q/q growth, translating into a 1.1% y/y gain for 2015.
• France - Household Consumption Survey - December: Forecast at 0.1% m/m and 1.3% y/y growth, with temporary impacts from the Paris terrorist attacks.
• France - Producer Price Index - December: Forecast at -2%, driven by low energy prices and increased automation.
• Spain – Government Finance – December: Forecast at a deficit of €4.3 billion, with a cumulative fiscal deficit of -€31.8 billion for 2015.
• Euro Zone – Monetary Aggregates – December: Forecast at 5.3% y/y growth, with the ECB's stimulus measures likely to continue supporting money supply growth.
• Euro Zone – Preliminary Consumer Price Index – January: Forecast at 0.4% annual inflation, influenced by base effects and the ongoing recovery.

Key Information

• The current credit cycle is past its prime, with high-yield borrowing activity declining significantly.
• The Fed's tightening policy is in conflict with the weak inflation outlook and corporate credit conditions.
• Demographic shifts are expected to increase personal savings and slow household expenditures.
• The report includes forecasts and analysis for key economic indicators across the US, Europe, and Asia-Pacific.
• Moody's Analytics markets and distributes all Moody's Capital Markets Research materials.