Van Hesser's 3 Things in Credit - A KBRA Podcast

This week, our 3 Things are: 1. Disintermediation of banks from riskier lending. It’s a positive development for credit markets. 2. The importance of the forward look. Be careful about relying on backward-looking indicators. 3. A good week for spreads. Will it hold up?

This week, our 3 Things are: 1. Inflation and credit. This week’s hot CPI and PPI prints increase the likelihood of a harder landing in credit. 2. “Worst ever” sentiment surveys. We’ll provide some perspective. 3. Earnings in a recessionary and rising rate environment. We’ll help you define those dimensions.

This week, our 3 Things are: 1. Corporate earnings. Growth should slow, but remain good enough for credit. 2. KBRA Altman Default Forecast. Our latest reading has jumped significantly. 3. Lack of Economic Excesses. That points to a shorter and shallower downturn.

This week, our 3 Things are: 1. Commodity price plunge. The narrative around much-discussed supply is shifting. 2. Consumer staples. After a period of heightened event risk, the sector’s defensive nature is conveniently returning. 3. Texas Manufacturing Outlook Survey. Activity in the Lone Star State has fallen dramatically.

This week, our 3 Things are: 1. An oil spike. It often triggers central bank tightening. 2. Sentiment surveys. See if you can find some optimism; we can’t. 3. Bank stress tests. The outcome can be the difference between a mild and a more severe recession.

This week, our 3 Things are: 1. Inflation. It continues to bedevil markets. 2. Fed forecasts. Here’s a perspective on the labor piece. 3. Uncertainty leads to volatility. We’ll weigh the bull and bear cases.

This week, our 3 Things are: 1. The energy spike. It’s likely to get worse. 2. Equity valuations are still high. Why do we care? 3. The redevelopment of JFK Airport. A unique public-private partnership.

This week, our 3 Things are: 1. Growth shock. It’s the new inflation. 2. ISM Manufacturing stops its skid. We have a non-consensus view. 3. Consumer spending. BofA and Amex give fresh perspectives.

This week, our 3 Things are: 1. Uncertainty. We’ve got more now than we’ve had for some time. Two market heavyweights give us updated perspectives. 2. Tightening. The Fed’s jawboning has been effective. 3. Rising distress. Recent movements confirm an up-in-quality view.

This week, our 3 Things are: 1. Retail. How do you square retail sales with Walmart and Target earnings releases? 2. Inflation expectations. We came across a new measure that shows quite divergent views across the world. 3. What’s ahead? Markets corrected at a furious pace—now what?

This week, our 3 Things are: 1. The correction. Markets have reset—now what? 2. The Fed’s Financial Stability Report is out. It’s really not so bad. 3. The fall in cryptocurrencies. Here’s how it affects credit.

This week, our 3 Things are: 1. Bonds are back. It’s been painful, but entry points make sense again. 2. Labor markets in focus. There’s more here than just a low unemployment rate. 3. Fed tightening cycles. Our research shows a different narrative.

This week, our 3 Things are: 1. Freight movements. Those fixated on sticky high inflation should pay attention. 2. Housing markets. There are many sides to this all-important economic sector. 3. Margin update. How successful have companies been in passing along higher costs?

In this week's episode: 1. Our KBRA Altman default forecast. We’ll dig into the model’s outcome. 2. A potential energy spike. The single biggest risk we see to credit markets. 3. JPMorgan Chase’s loan loss reserve build. Should we worry?

In this week's episode: 1. Security. A new world order demands it, and it touches several sectors in credit markets. 2. Sinking surveys. Watch what they do, not what they say is being tested. 3. Corporate pricing power. Watch out for consumers voting with their feet.

In this week's episode: 1. Recession risk. It’s rising. We lay out a timetable. 2. Homebuilder blues. How is this possible amid a chronic house shortage? 3. Jamie Dimon’s letter. There’s always a lot to unpack.

In this week's episode: 1. Earnings are normalizing. That means weakening. We’ll explore what that means for credit. 2. Moving to late cycle. So why are spreads tightening? 3. Yield curve inversion. Does it really matter?

In this week's episode: 1. Extreme volatility. We cannot rule out contagion just yet. 2. New issue supply. Against a rash of unfavorable forces impacting corporate credit performance in 2022, this could be a bright spot. 3. Fed confusion. We’re not sure the messaging squares up with what we’re seeing.

In this week's episode, KBRA Chief Strategist Van Hesser discusses: 1. Small business. This all-important economic engine is sputtering. We’ll explore. 2. Earnings durability. Estimates remain at a cyclical peak. Does that make sense? 3. Places to hide. Some sectors are built better for this kind of environment. We’ll name names.

In this week's episode, KBRA Chief Strategist Van Hesser discusses: 1. Geopolitical shocks and credit. At what point do geopolitical events impact markets? 2. China. Can it play a positive role in the Russia-Ukraine conflict? 3. Russia facing another possible default. What’s the risk of contagion?

In this week's episode, KBRA Chief Strategist Van Hesser discusses: 1. Russia. While Russia and Ukraine represent less than 2% of the global economy, Russia’s invasion will play a key role in an emerging new world order. 2. Normalization and the risks to credit. We’ve written an extensive piece about what that means. We’ll give you the highlights. 3. Falling cyclicals. That doesn’t square up with...

In this week's episode, KBRA Chief Strategist Van Hesser discusses: 1. Equity volatility. It does bleed into credit spreads. Keep an eye on it. 2. A bank examiner’s view of credit risk. It doesn’t quite square up with what we hear from the banks. 3. Supply chains. Here’s an easy way to mark their progress in opening up.

In this week's episode, KBRA Chief Strategist Van Hesser discusses: 1. Inflation fears. It’s become a national obsession. Our thoughts on what it means for credit markets. 2. Consumer debt jumps higher. A sign of confidence or stress? We’ll explore. 3. Recession risk. One respected reading suggests there is a 50% likelihood for a recession within the next 12 months. We’ll clue you in.

In this week's episode, KBRA Chief Strategist Van Hesser discusses: 1. Slowing growth. Q4’s extraordinary GDP print feels like ancient history. Best to prepare for what’s ahead. 2. The ISM manufacturing index. This indicator has proven to be a useful guide to where credit spreads are headed. 3. Larry Fink’s annual letter to CEOs. Here’s what his 2022 message means for creditors.

In this week's episode, KBRA Chief Strategist Van Hesser discusses: Jerome Powell’s even more hawkish pivot. A more aggressive tightening stance introduces additional risk into our outlook. Stocks versus bonds. Why has credit held in relatively well compared to equities’ powerful sell-off? We’ll explore. The all-important U.S. consumer. We’ll canvas three big consumer lenders’ Q4 results for insig...