Van Hesser's 3 Things in Credit - A KBRA Podcast

This week, our 3 Things are:

1. Q4 outlook. History tells us to expect volatility. We’ll lay out important parameters.
2. Price of gas. Its ability to move sentiment is too important to downplay.
3. Earnings conference calls. An important new academic work says credit investors don’t pay close enough attention to credit signals embedded in those calls. We’ll interview one of the authors.

This week, our 3 Things are:

1. Where did the recession go? Here’s a clue—it continues to lurk in the shadows.
2. Falling energy prices. Be careful what you wish for.
3. Goods versus services. The mix in the economy does not bode well for corporate earnings.

This week, our 3 Things are:

1. Supply constraints. What’s happening with the other part of the inflation story?
2. Recession timing. We’ll share our view.
3. Credit versus stocks. By one measure, credit hasn’t looked this good since 2010.

This week, our 3 Things are:

1. The Fed’s pivot. Are we really there?

2. A bounce in the price of risk assets. Real, or a dead cat bounce?

3. 2023 corporate earnings. What do those estimates tell us about today?

This week, our 3 Things are:

1. Uncertainty. It’s there, but it’s not as bad as you might think.

2. Liquidity. The lack of liquidity clearly affects credit—but it also affects inflation.

3. CLOs. They have been a laggard in terms of returning to normal.

This week, our 3 Things are:

1. Disintermediation of banks from riskier lending. It’s a positive development for credit markets.
2. The importance of the forward look. Be careful about relying on backward-looking indicators.
3. A good week for spreads. Will it hold up?

This week, our 3 Things are:

1. Inflation and credit. This week’s hot CPI and PPI prints increase the likelihood of a harder landing in credit.
2. “Worst ever” sentiment surveys. We’ll provide some perspective.
3. Earnings in a recessionary and rising rate environment. We’ll help you define those dimensions.

This week, our 3 Things are:

1. Corporate earnings. Growth should slow, but remain good enough for credit.

2. KBRA Altman Default Forecast. Our latest reading has jumped significantly.

3. Lack of Economic Excesses. That points to a shorter and shallower downturn.

This week, our 3 Things are:
1. Commodity price plunge. The narrative around much-discussed supply is shifting.
2. Consumer staples. After a period of heightened event risk, the sector’s defensive nature is conveniently returning.
3. Texas Manufacturing Outlook Survey. Activity in the Lone Star State has fallen dramatically.

This week, our 3 Things are:
1. An oil spike. It often triggers central bank tightening.
2. Sentiment surveys. See if you can find some optimism; we can’t.
3. Bank stress tests. The outcome can be the difference between a mild and a more severe recession.