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The Latest from
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May 17, 2024
AR – Base Case CDS 91bps, Base Case iCDS 111bps,
Negative Case iCDS 134bps, 2029 7.625% Bond YTW of 6.513%, iYTW of 5.723%,
Ba1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens,
Low Refinancing Need...
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May 16, 2024
KSS – Base Case CDS 447bps, Base Case iCDS 254bps,
Negative Case iCDS 301bps, 2029 7.250% Bond YTW of 8.679%, iYTW of 7.009%,
Ba2 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens,
Low Refinancing Need...
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May 16, 2024
- The Market Follows Earnings Growth. Analysts expect AI and a broader market recovery to fuel a slight recovery in growth this year, contrary to management’s actions and indications. After seeing profits shrink 9% in 2023, investors are betting corporations can resume margin expansion and growth to fuel an earnings recovery. In recent months, management’s growing willingness to invest based on sentiment analysis may fuel that growth as credit overhangs are removed.
- The potential debt default risk has been significantly reduced. Credit availability is still lacking, and corporations and individual consumers are starting to show pressure from credit tightening, but they are not stretched to the point of threatening a wave of defaults. Without significant refinancing risk, the current tight credit environment is likely to be a tax on growth as opposed to a potential catalyst for a recession.
- After the recent strong rally, valuations reflect a bet on growth resuming, and the market is now at extended sentiment levels, increasing the risk of volatility.
- Monthly inflections:
- Credit (55% of macro outlook): Negative (no change)
- Earnings Growth (30%): Neutral (no change)
- Momentum/Sentiment (10%): Negative (downgrade)
- Valuations (5%): Negative (no change)
- Timetable Recommendation: 40% Equity/60 Bond Split for 5-10 Year Money and 18 Month Dollar Cost Averaging....
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May 15, 2024
Featured Top Idea
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OII – Oceaneering International, Inc.
Action: Buy 2028 6.000% Bonds CUSIP: 675232AB8 (6.510% YTW, 6.090% iYTW)... -
May 14, 2024
AMCX – Base Case iCDS 566bps,
Negative Case iCDS 670bps, 2029 4.250% Bond YTW of 12.803%, iYTW of 10.157%,
B1 Rating from Moody’s, XO (equivalent to Ba1) Rating from Valens,
Low Refinancing Need...
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May 8, 2024
Featured Top Idea
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MU – Micron Technology, Inc.
Action: Buy 2028 5.375% Bonds CUSIP: 595112CA9 (5.423% YTW, 4.903% iYTW)
Buy 2030 4.663% Bonds CUSIP: 595112BQ5 (5.571% YTW, 4.669% iYTW)
Buy 2031 5.300% Bonds CUSIP: 595112CD3 (5.654% YTW, 4.674% iYTW)... -
May 6, 2024
HOLX – Base Case iCDS 77bps,
Negative Case iCDS 117bps, 2029 3.250% Bond YTW of 6.029%, iYTW of 5.409%,
Ba1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens,
Low Refinancing Need
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