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The Latest from
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August 17, 2023
- Investors’ Blinders To Risk Are Increasing The Risk Of A Correction. After the recent rally, investor sentiment is once again elevated. More bullish sentiment is likely to increase market volatility in the short-term.
- Credit availability is lacking, and corporates and individual consumers are starting to show pressure from credit tightening. A better debt maturity schedule for borrowers than in prior cycles reduces the risk of a severe recession, but credit issues highlight the risk of a recession is growing.
- The Fed’s efforts to slow lending have pushed management teams to be more cautious. Uniform earnings growth continues to decelerate. In late 2022, data showed management teams holding off on capex, and in early 2023, management teams slowed overall borrowing as well.
- Monthly inflections:
- Credit (55% of macro outlook): Negative (no change)
- Earnings Growth (30%): Negative (no change)
- Momentum/Sentiment (10%): Negative (no change)
- Valuations (5%): Negative (no change)
- Timetable Recommendation: 50/50 Split for 5-10 Year Money and 24 Month Dollar Cost Averaging....
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August 17, 2023
CIEN – Base Case iCDS 120bps,
Negative Case iCDS 176bps, 2030 4.000% Bond YTW of 6.422%, iYTW of 5.392%,
Ba1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens,
Low Refinancing Need...
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August 16, 2023
UBER – CDS 158bps, Base Case iCDS 50bps,
Negative Case iCDS 64bps, 2027 7.500% Bond YTW of 6.519%, iYTW of 4.605%,
Ba3 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens,
Low Refinancing Need...
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August 14, 2023
CC – Traded CDS 255bps, Base Case iCDS 157bps,
Negative Case iCDS 266bps, 2028 5.750% Bond YTW of 7.737%, iYTW of 5.716%,
Ba3 Rating from Moody’s, XO (equivalent to Baa3) Rating from Valens,
Low Refinancing Need...
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August 9, 2023
HOLX – Base Case iCDS 83bps,
Negative Case iCDS 123bps, 2028 4.625% Bond YTW of 6.079%, iYTW of 5.069%,
Ba1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens,
Low Refinancing Need...
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August 9, 2023
Featured Top Idea
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QRVO – Qorvo, Inc.
Action: Buy 2029 4.375% Bonds CUSIP: 74736KAH4 (5.990% YTW, 5.210% iYTW)... -
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