Showing posts from May, 2018

Moody's Credit Markets Review and Outlook: Bullish Default Rates and Treasury Yields

Moody’s is one of the big three credit rating agencies besides Standard & Poor’s and Fitch Group. Investors around the world look to Moody’s to properly assess the financial health of U.S. companies and therefore the risk in U.S. equities. The well-respected organization also posts weekly reports and analysis on various rates and credit data. Weekly, it outlines the biggest issues in the credit and risk in its “ Credit Markets Review and Outlook ” typically written by its chief economist, Jon Lonski. This week, the report highlights some dynamics in the equity market that show some sensitivity to certain indicators in the credit market. Since the beginning of 2018, the market has been relatively volatile coming off highs in late January. The worst seems to be over, but the S&P 500 appears to be locked into a trading range. Moody’s analysis suggests the market will resume its growth based on falling default rates. Moody’s states that “roughly 88 percent of the 209 year-ov

Iran's Economy: A Statistical Profile

Recently, President Donald Trump has announced the jarring decision to pull out of the Joint Comprehensive Plan of Action (JCPOA) also informally known as the Iranian nuclear deal. Since his campaign, he has suggested the deal was a poor one for the United States, and that if he was elected president, he would look to rework the deal. To the dismay of the other members of the United Nations Security Council who signed the deal, he followed through on his promise. In the deals place, President Trump has reintroduced the idea of economic sanctions on Iran which were lifted at the beginning of 2016. The lifting was supposed to help propel Iran to new economic growth allowing oil exports to resume and foreign money to flow. In a paper written by an IMF economist, three benefits were supposed to take effect: Exports of oil and gas would resume and cause a “positive external demand shock to the Iranian economy.” Accessibility to financial services, specifically “restored access to t

Commodity Futures Trading Commission: LNG Market Report

The U.S. Commodity Futures Trading Commission (CFTC) produces data and reports on the futures, options, and swaps reports. On May 16th, 2018, it released research and developments in the Liquefied Natural Gas (LNG) market. The paper provides broad background information as well as a look forward into projections for U.S. exports and productions. Combining perspectives from organizations around the world, the CFTC is able to develop a holistic view from different forecasting models. The CFTC sees three major market forces in the LNG futures market. As natural gas is the only fossil fuel with “a growing share of global energy,” global demand for it and LNG is expected to expand. The lower costs of producing natural gas and LNG, a result of rampant shale production, enable demand increases to be met with increases in exports. Because producing and exporting LNG require infrastructure, the level of investment in that infrastructure will be a huge force in determining the c

FactSet Earnings Insight: 2018 First Quarter Earnings in Review

The FactSet Earnings Insight report provides summary statistics for the latest trends in the earnings of the S&P 500 companies. The dynamic paper that is constantly updated to stay with the most recent earnings trends addresses earnings estimates, earnings guidance, revenues, and more. The report is available here and will remain updated on that link, so be sure to check back every quarter to see the new data posted by FactSet. From FactSet Earnings season for the first quarter of 2018 is coming to a close with 93 percent of S&P 500 companies having already reported. Looking back, the first earnings season of the year proved to be a success despite broad volatile trading. According to FactSet, 78 percent of S&P 500 companies reported a positive EPS surprise and 77 percent reported a positive sales surprise. If the 78 percent number holds, it will be the highest recorded by FactSet. So far, on average companies are posting earnings 7.5 percent above wha

2018 Rating Global Leaders: Trump's Trade Policy Disappoints

Gallup is famous for its presidential approval rating surveys in the United States with numbers that are cited often by politicians in campaigns and interviews. The Rating World Leaders report is an expansion of that survey where Gallup opens up the question of approval to the rest of the world. Country-by-country, the survey determines approval ratings for almost every country in the world on an annual basis. In the 2018 report, the Trump administration is put on the stage. Here are some highlights of the report. To start, here’s a visual of the world ratings which are represented as a percentage of individuals who “approve,” “don’t approve,” or abstain. The map above shows some interesting trends. The entirety of the Western hemisphere across the Atlantic Ocean is in red. The Trump administration’s insistence on reevaluating NAFTA probably must do a lot with disapproval in this area. However, the fact that there is no green is more telling than anything. Most of Euro