Credit Benchmark have released the June Credit Consensus Indicators (CCIs). The CCI is an index of forward-looking credit opinions for US, UK and EU Industrials based on the consensus views of over 30,000 credit analysts at 40 of the world’s leading financial institutions. Drawn from more than 800,000 contributed credit observations, the CCI tracks the total number of upgrades and downgrades made each month by credit analysts to chart the long-term trend in analyst sentiment for industrials.
This year has not been kind to the beleaguered US retail sector. Several major chains, including Neiman Marcus, JC Penney, and J Crew have declared bankruptcy, joining a host of smaller retailers that have succumbed to the pandemic-driven pause in brick-and-mortar retail shopping. More are expected, and a similar scenario is playing out in the UK retail sector.
The Luxury Goods sector has had phenomenal success over the past ten years. Growing global middle classes and readily available credit have paved the way for a social media-driven explosion of demand for high quality brands.
Problems in the US housing sector abound. Credit quality for both US- and UK-based firms continues to deteriorate, but the moves are significantly more dramatic in the US, with average probability of default increasing 3% over the last month and 13% over the past year.
The BBB cliff has been widely discussed and the growing number of recent “Fallen Angels” shows that a number of corporates are falling over the cliff edge.
