20141113-穆迪服务-a_Passing_Grade_29页_547kb

Market Outlook Summary

Core Content

This document provides a comprehensive overview of the credit and economic market outlook for late 2014 and early 2015, focusing on corporate credit, bond issuance, inflation trends, and key economic indicators. It highlights the performance of various sectors, the impact of monetary policy, and the outlook for credit spreads and debt markets.

Main Points

Corporate Credit Outlook

• Corporate Credit Gives 2015 Revenue Outlook a Passing Grade: The overall revenue growth for S&P 500 non-financial companies in Q3-2014 was 3.7%, slightly lower than Q2-2014's 5.1%.
• Core Business Sales Growth: Core business sales (retailers, manufacturers, and wholesalers excluding energy) grew by 5.5% annually in Q3-2014, the best performance since Q1-2012.
• Sector Performance:
  • Health Care: Yearly sales growth of 12.3%.
  • Information Technology: 3.5% growth.
  • Discretionary Consumer: 6.1% growth.
  • Energy Companies: A price-driven drop of -2.8% affected overall sales, but energy sales rose 3.0% in Q3-2013 due to a less hostile pricing environment.
  • Consumer Staples: 2.0% growth.
  • Industrials: 3.4% growth.
  • Materials: 2.5% growth.
  • Telecom Services: 2.9% growth.

Credit Market Trends

• Investment Grade Spreads: Near 121 bp by year-end 2014.
• High Yield Spreads: Dipped to 420 bp by year-end 2014 from 424 bp in October.
• High Yield Issuance: Global issuance reached $534 billion in early November, a 7% increase over the previous year and 162% above the 2007 average.
• Low-Rated Issuance: Debt from the lowest rated borrowers (B3 or lower) has been limited, with year-to-date issuance at $125.8 billion, just below last year's record of $126.4 billion.
• Emerging Markets: High yield debt issuance in emerging markets has slowed significantly, with a 37 billion drop from the 2013 peak. Concerns about growth and corporate governance limit investor enthusiasm.

Inflation and Labor Market

• Inflation Expectations: One-year inflation expectations in the University of Michigan survey reached a four-year low of 2.9% in October.
• Wage Growth: Despite a tightening labor market, wage growth is expected to remain around 2% annually.
• Labor Market Slack: The labor market still has significant slack, with only 16% of the 8.0 million increase in the working-age population reflected in payroll growth.

Economic Indicators

• Consumer Confidence: The University of Michigan survey showed a seven-year high in October, driven by job growth and lower gas prices.
• Retail Sales: Expected to rise by 0.2% overall in October, with auto sales likely to offset the September decline.
• Industrial Production: Expected to grow by 0.2% in October, with capacity utilization at 79.3%.
• Housing Starts: Forecasted to rise to 1.03 million in October, with a 16% year-over-year increase in Q3-2014.
• Euro Zone Growth: Expected to grow by 0.2% in Q3-2014, with weak private sector activity and subdued government spending.

Key Information

Monetary Policy

• FOMC Minutes: Will provide insights into the end of QE3 and future policy actions, with a focus on wage and price pressures.
• ECB Actions: Started buying covered bonds in mid-October and may expand asset-backed securities purchases in the fourth quarter.
• UK Monetary Policy: The Bank of England kept rates at 0.5% and the asset-purchase program at £375 billion. Uncertainty about spare labor market capacity persists.

Risk and Outlook

• Credit Market Outlook: A sustained upturn in high yield credit markets is needed to boost issuance in the riskiest rating categories.
• Small Business Sales: Continued weakness, with a three-month average of -3.0 percentage points in October.
• Global PMI: The JPMorgan Global Composite PMI averaged 53.3 since 2012, below the prior cycle's average of 56.8.

Market Outlook

• Emerging Markets: Need stronger growth to support increased lending from developed country investors.
• Turkey: The OECD's leading index has been flat since November 2013, contributing to the decline in the 10-year US Treasury yield.

Conclusion

The market outlook for late 2014 and early 2015 indicates a cautiously optimistic stance, with corporate credit and high yield issuance showing resilience despite economic uncertainties. However, the potential for a slowdown in emerging markets and the persistent slack in the labor market suggest that investors should remain cautious. The document emphasizes the importance of continued economic growth and improved corporate fundamentals to support a more robust credit market environment.