The pharmaceutical market has exploded in recent years with the rise of new drugs to help treat obesity and diabetes. The shift marks a huge opportunity for the pharmaceutical sector, which is pursuing the diabetes and obesity markets with four blockbuster drugs today: Ozempic and Wegovy from Novo Nordisk, and Mounjaro and Zepbound from Eli Lilly. In the first segment Mike Levesque looks at credit implications for the pharmaceutical industry, whose weight-loss drugs will generate some $80 billion in annual sales by 2030. Then at 11:10 minutes, Linda Montag discusses how the rise of the weight-loss drug segment will affect the packaged food, restaurant and packaging sectors.

Guests: Michael Levesque, Senior Vice President, Corporate Finance Group; Linda Montag, Senior Vice President, Corporate Finance Group. 

Host: Jeff Pruzan, Vice President – Senior Research Writer, Moody’s Investors Service.

To read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.)

• Cross-Sector – Global: Growth in obesity drugs will affect multiple industries but impact will take years

The commodities sector isn’t looking rosy and that is largely due to the outsize influence of China, which is currently in the grip of an economic slowdown. These pressures come on top of geopolitical damage to trade and supply chains, and the energy transition which is increasing global appetite for some commodities and eroding it for others. Our analysts look in particular at the fortunes of steel and commodity chemicals – both of which are seeing plunging demand from China. 

Later in the episode (at 12.49 mins) we also look more closely at gold. Investors are riding record highs for this very particular commodity, a traditional investment ‘safe haven’ whose idiosyncratic behaviour sometimes ignores the normal rules. 

Guests: Hui Ting Sim, Associate Vice President – Corporate Finance Group, Moody’s Ratings; Mike Zhu, Vice President – Senior Analyst – Corporate Finance Group, Moody’s Ratings; Jamie Koutsoukis, Vice President – Senior Analyst – Corporate Finance Group, Moody’s Ratings

Host: Jeff Pruzan, Vice President – Senior Research Writer, Moody’s Ratings

To read more on this topic, visit the Macro Views page on Moodys.com (some content only available to registered users or subscribers). 

The outlook for the global real estate market remains negative with the bumpy economy, tight financing conditions and the surge in remote work. In the US, we expect rental income growth for offices to remain poor overall and apartment income growth to moderate this year with supply up, mostly in parts of the Sunbelt. Globally, Japan is a bright spot with supply-demand dynamics in the commercial market relatively stable. In Europe, the commercial market remains at risk of further deterioration, but the UK is likely to recover quicker as asset prices have fallen at a faster pace.

Guests: Lori Marks, Vice President - Senior Credit Officer, Global Corporate Finance Group and Ana Luz Silva, Vice President - Senior Analyst, Global Corporate Finance Group 

Host: Tania Hall, Senior Vice President - Senior Research Writer, Moody’s Ratings

To read more on this topic, visit Moodys.com (Some content available only to registered users or subscribers.):

Related Research:

• Real Estate – Global: Outlook remains negative as high funding costs persist and the economy slows
• Real Estate – US: CRE fortunes vary by lender and property type, with office facing multiple risks
• Housing and Housing Finance – US: Homeowners with low rates stay put, keeping housing in a holding pattern
• Real Estate – Europe: Credit quality still at risk despite improving sentiment; greater divergence likely
• Commercial Real Estate – UK: Recovery set for second half of 2024, but pockets of distress will persist

In our opening segment, we discuss the slight slowdown in global market share growth for battery electric vehicles (BEVs) as some incentives to buy have ended, yet prices remain high. A scarcity of charging stations in Europe and the US also remains a deterrent for consumers. Our second segment, which starts at 9:40, focuses on the charging shortage and who will pay for expansion.

Guests: Matthias Heck, Vice President - Senior Credit Officer, Global Corporate Finance Group and Rene Lipsch, Vice President - Senior Credit Officer, Global Corporate Finance Group

Host: Jeff Pruzan, Vice President – Senior Research Writer, Moody’s Ratings

To read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.)

Related Research:

• Auto Manufacturing – Global: Vehicle volume growth to be muted after last year’s strong finish
• Automotive Manufacturing – EU & US: Charging network build-out must speed up to support EU, US automakers’ EV plans
• Automotive Manufacturing – Global: Compliance risks in emission and safety regulations are becoming more evident
• Fuel Retailers – Global: Electrification will erode market dominance, investment to curb cash flow

Artificial Intelligence or AI is predicted to have a profound impact on many areas of business. In this episode of Behind the Bonds we assess where AI innovation is already showing significant potential. Which industries can expect to see improved productivity and what are the potential timelines for any positive impact on credit quality? We also discuss the disruptive potential of these new technologies and the risks to jobs.

Later in the episode our colleagues look in more depth at the media, where AI’s potential is presenting opportunities and generating both opposition and collaboration from content creators.

Guests: Francesco Bozzano, Vice President – Senior Analyst, Global Corporate Finance Group and Agustin Alberti, Vice President – Senior Analyst, Global Corporate Finance Group.

Host: Tania Hall, Senior Vice President – Senior Research Writer, Moody’s Investors Service.

To read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.)

Related Research:

• Nonfinancial corporates – Global: Market leaders in data-rich sectors will gain most from AI advances
• Digital Transformation – Global: 2024 AI Outlook – Swift progress likely but rapid roll-out will bring risks
• Media & Publishing – Cross Region: GenAI should benefit media companies, mainly by boosting productivity

In 2024 we see an uneven picture for companies across the globe. For those in North America and Asia-Pacific, excluding China, the credit outlook is stable. But in Europe, the Middle East and Africa, and Latin America the outlook is negative. Driving this testing global environment are higher for longer interest rates which are raising the cost of borrowing and re-financing. This is a particular challenge for speculative-grade companies. Higher rates are also weighing on consumer demand in some sectors, particularly real estate.  

Later in the episode at 11.30mins, our colleagues in Hong Kong take a closer look at prospects for companies in China, in recent decades the driver of the global economy, but facing a negative credit outlook for 2024. 

Guests: Myriam Durand, Managing Director, Global Corporate Finance Group and Gloria Tsuen, Vice President, Senior Credit Officer, Global Corporate Finance Group. 

Host: Jeff Pruzan, Vice President – Senior Research Writer, Moody’s Investors Service.   

To read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.)  

Links: 

Global Outlook Segment

• Nonfinancial Companies – North America: 2024 Outlook - Stable on relatively robust growth, even as high rates drive risk
• Nonfinancial Companies – APAC ex China: 2024 Outlook - Stable on sustained growth in large, domestic-focused economies
• Nonfinancial Companies – EMEA: 2024 Outlook - Negative as higher rates bite and consumers remain cautious
• Nonfinancial Companies – Latin America & Caribbean: 2024 Outlook - Negative amid high rates, slow growth and subdued commodity prices

China Segment

• Nonfinancial Companies – China: 2024 Outlook - Negative amid lower growth and prolonged property downturn
• Cross Sector – China: China will be more selective in providing support to state-owned enterprise
• Cross Sector – China: Slowing growth intensifies spillover effects of long property market downturn
• Macroeconomics– China: Medium-term growth outlook will reflect effectiveness of economic rebalancing   
• Credit Conditions – China: Soft economic recovery heightens contingent liabilities from LGFV debt risks

This year has been a very weak one for leveraged finance deals as aggressive global monetary tightening hit markets. In this episode we explain why we see a gradual improvement in 2024, with refinancings driving new issuance in the US and EMEA. 

Guests: Chris Padgett, Associate Managing Director of North America Leveraged Finance Research and Jeanine Arnold, Senior Vice President of Leveraged Finance, EMEA. 

Host: Tania Hall, Senior Vice President – Senior Research Writer, Moody’s Investors Service.

To read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.) 

Related Links:

• 2024 Outlook – Growing refinancing needs, higher-quality LBOs, will drive new issuance

Retailers in North America and Europe are looking forward to another bustling holiday shopping season—but consumers may not be as eager this year as stores have hoped amid fairly high inflation, even with a strong labor market. Will 2024 get any better for retailers and makers of apparel? Later we look at the global transport sector—where container shipping continues to struggle, even while other modes of transportation look for improved earnings in 2024.

Guests: Christina Boni, Senior Vice President; Mickey Chadha, Vice President-Senior Credit Officer; and Daniel Harlid, Vice President-Senior Credit Officer, all from the Corporate Finance Group of Moody’s Investors Service.

Host: Tania Hall, Senior Vice President – Senior Research Writer, Moody’s Investors Service.

To read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.)

Related Research:

• Retail & Apparel – Global: Recovery delayed to 2024 as inflation fatigue hurts spending; outlook still stable
• Retail & Apparel – Global: Outlook is stable as profits set to recover from lower costs and inventory realignment
• Retail – US: Stronger than expected September retail sales pushes Q3 higher, but year to date spending remains muted
• Retail & Apparel – EMEA: Quarterly Update: Trading conditions remain difficult despite some retailers' positive results
• Transportation – Global: Outlook stable despite weakening business conditions for container shipping
• Shipping – Global: Tougher Panama Canal drought restrictions will have mixed credit effects for shipping
• Macroeconomics – US: US GDP revisions confirm economic resilience, but consumer spending momentum dipped in Q3

Private credit lenders built stores of capital that we expect will be put to work competing with banks to fund a new wave of leveraged buyouts. In the first segment of this episode, we discuss LBO competition and the risks it poses. Later, our guest lays out the concentration of private credit among a handful of giant asset managers building their own, largely self-contained lending ecosystems.

Guests: Christina Padgett, Associate Managing Director and Sandra Veseli, Managing Director, both from Moody’s Investors Service’s Corporate Finance Group; and Rory Callagy, Associate Managing Director, with Moody’s Financial Institutions Group.

Host: Jeff Pruzan, Vice President – Senior Research Writer, Moody’s Investors Service.

To read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.)

Links:

• Private Credit – Global: Syndicated and private lenders will spar as LBOs revive, upping systemic risk

Big technology companies have been on a wild ride over the past few years, with the pandemic-driven boom followed by an inevitable hangover as economic uncertainty loomed. In the first segment of this episode, we examine the outlook for the global diversified information technology sector over the next 12-18 months. Then at 10.02 we discuss how the European Chips Act will help the region’s semiconductor manufacturers in the face of stiff competition from other parts of the world.

Guests: Raj Joshi Senior Vice President and Dirk Goedde Vice President-Senior Analyst - Corporate Finance Group, Moody’s Investors Service. 

Host: Tania Hall Senior Vice President – Corporate Finance Group, Moody’s Investors Service. 

To read more on this topic, visit The Big Picture page on Moodys.com (some content only available to registered users or subscribers).