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

This week, our 3 Things are: 1. Cost of capital. What does its rise mean for credit? 2. U.S. consumers. Will they continue to spend? 3. Strong demand for credit. Why is it happening at this point of the credit cycle?

This week, our 3 Things are: 1. Inflection point. We are at one, we'll tell you which way we're headed. 2. Big bank color. What are the largest lenders seeing? 3. Ed Altman weighs in. He's worried about one thing. We'll clue you in.

This week, our 3 Things are: 1. CarMax and Albertsons. What do they say about consumer sentiment? 2. Credit crunch. While we wait for the SLOOS, here's an early look. 3. Recession probabilities. Can 100% equal 35%?

This week, our 3 Things are: 1. Community and regional bank business model. We examine it. 2. Bad news rising. Is this now a trend? 3. Banking crisis. Jamie Dimon says it's not over. We'll have a look.

This week, our 3 Things are: 1.Market sentiment. It's fluid. 2. Earnings season is back. What will the banks say? 3. Chinese growth. It's positive … right?

This week, our 3 Things are: 1.Protecting bank depositors. We think that's happening ... 2. Uncertainty. It's back and it's unwelcome. 3. AT1s. Is this the end of a market?

This week, our 3 Things are: 1. The glass is suddenly half empty. We'll walk you through what's changed. 2. Consumer spending. How long can it continue? 3. Silver linings. John McEnroe might say, “You can't be serious!” But they're there.

This week, our 3 Things are: 1. Long and variable lags. Are markets priced for them? 2. Event risk. How should we view it in this environment? 3. High yield. Is there value at this point?

This week, our 3 Things are:1. Private credit. What's behind the growth?2. Consumer expectations. Just how meaningful are they?3. Housing. The latest in this all-important leading indicator.

This week, our 3 Things are: 1. Walmart earnings. Its forward guidance is not the stuff of no landing. 2. Larry Summers. How to avoid a Wile E. Coyote moment. 3. Affordable energy. Remember what comes down can go up.

This week, our 3 Things are: 1.Corporate margins. They're falling. Should we worry? 2. Earnings growth. It's falling. What does this signal? 3. Consumer wealth. It is constructive overall, but not for everyone.

This week, our 3 Things are: 1. Where is the recession? The answer lies in the uniqueness of this cycle. 2. Lender sentiment. Banks and markets have diverged. 3. Stability. It has returned to risk markets.

This week, our 3 Things are: 1. The Fed. Something for everyone. 2. China. More thoughts on its impact on credit. 3. Market tone. It's better, for now.

This week, our 3 Things are: 1. Hard data confirming slowdown. It's here. 2. Earnings recession. It's not good for credit, but magnitude matters. 3. Market-implied recession models. They can be misleading.

This week, our 3 Things are: 1. Deterioration. When will it show up? 2. Unemployment. When (and where) will it show up? 3. Big bank results. We'll summarize what the biggest players in credit are seeing.

This week, our 3 Things are: 1. A softer landing. How possible is it? 2. Corporate margins. Contracting, yes, but how meaningfully to credit? 3. Services demand. The latest data says it's falling—what this means for spreads.

This week, our 3 Things are: 1. A new credit paradigm. It's here and it's different. 2. China's reopening. That's good, right? Maybe… 3. Labor market. What's good for consumer finance might not be good for economic growth. We'll explain.

This week, our 3 Things are: 1. Growth concerns. Inflation concerns are so 2022. 2. Bank valuations. What those say about this cycle. 3. Treasury volatility. It should settle down.

This week, our 3 Things are: 1. KBRA's European Securitization Survey. Fresh insight into investor sentiment. 2. Credit's canary in the coal mine. A Bloomberg survey shows what investors are watching. 3. Consumer borrowing. It's rising sharply. It fits the Fed's narrative.

This week, our 3 Things are: 1. Credit spreads. Why aren't they wider? 2. Catalysts. We'll explore those to the upside and those to the downside. 3. Economic indicators. We'll walk through those worth paying attention to.

This week, our 3 Things are: 1. Pain. It continues to guide the Fed. 2. Walmart and Target. Extraordinary earnings releases provide updated color on the health of the U.S. consumer. 3. Retail sales. Better than expected, but not helpful to the cause.

This week, our 3 Things are: 1. A cool CPI print. It is but one data point, but it suggests inflation is coming under control. 2. Avoiding recession. It's not our base case, but two highly credible voices lay out how it could happen. 3. Debt ceiling. It's back on the radar, and it's the thing no one wants to talk about.

This week, our 3 Things are: 1. Powell-speak. We don't think the message changed all that much, but markets struggled with it. We'll reiterate our view. 2. Caterpillar's earnings. Remarkable, and important context for investors. 3. Operating margins. It's an important marker to track.

This week, our 3 Things are: 1. Peak pessimism. Are we there yet? 2. Housing. It's all over the news again. Here's what you need to know. 3. The New York Fed's Underlying Inflation Gauge. It's a CPI alternative. Is the Fed watching?

This week, our 3 Things are: 1. Insight from Allianz. A CEO worth paying attention to. 2. Recession contours. It's coming, and it's becoming clearer what these look like. 3. Bank of America's look at U.S. consumers. It's reassuring but not surprising that they continue to exhibit strength.

This week, our 3 Things are: 1. CEO outlooks. Two new surveys offer interesting insights into what we're facing.2. ISM Manufacturing PMI. What the latest reading says about inflation. 3. GM's surge in auto sales. You heard that right. We'll have a look.

This week, our 3 Things are: 1. Wealth effect. It's real, and it's been a big part of the consumer's willingness to spend. Now, it's falling.2. The default cycle. We'll dimension what this upcoming one looks like.3. Volatility and financial stability.

This week, our 3 Things are:Corporate earnings. A spate of Q3 warnings are out, but FedEx's really makes us think.Federal Reserve tightening. The central bank's new and more realistic projections are an affront to risk.The price of credit. With what we're facing, does current pricing makes sense?

This week, our 3 Things are: 1. The hot CPI print. We have an alternative narrative. 2. The U.S. consumer. Two heavyweights weigh in with differing takes. We'll share our view. 3. Investor risk appetite. Fresh reads on where it's headed.

This week, our 3 Things are: 1. Credit crunch. How real is it? 2. Growth slowdown. Tightening is starting to bite. 3. Corporate earnings. Estimates have to come down, but what is the risk to credit?

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.

This week, our 3 Things are: 1. Inflation. It continues to bedevil markets. 2. Fed forecasts. Here's a perspective on the labor piece. 3. Uncertainty leads to volatility. We'll weigh the bull and bear cases.

This week, our 3 Things are: 1. The energy spike. It's likely to get worse. 2. Equity valuations are still high. Why do we care? 3. The redevelopment of JFK Airport. A unique public-private partnership.

This week, our 3 Things are: 1. Growth shock. It's the new inflation. 2. ISM Manufacturing stops its skid. We have a non-consensus view. 3. Consumer spending. BofA and Amex give fresh perspectives.

This week, our 3 Things are: 1. Uncertainty. We've got more now than we've had for some time. Two market heavyweights give us updated perspectives. 2. Tightening. The Fed's jawboning has been effective. 3. Rising distress. Recent movements confirm an up-in-quality view.

This week, our 3 Things are: 1. Retail. How do you square retail sales with Walmart and Target earnings releases? 2. Inflation expectations. We came across a new measure that shows quite divergent views across the world. 3. What's ahead? Markets corrected at a furious pace—now what?

This week, our 3 Things are: 1. The correction. Markets have reset—now what? 2. The Fed's Financial Stability Report is out. It's really not so bad. 3. The fall in cryptocurrencies. Here's how it affects credit.

This week, our 3 Things are:1. Bonds are back. It's been painful, but entry points make sense again. 2. Labor markets in focus. There's more here than just a low unemployment rate. 3. Fed tightening cycles. Our research shows a different narrative.

This week, our 3 Things are: 1. Freight movements. Those fixated on sticky high inflation should pay attention. 2. Housing markets. There are many sides to this all-important economic sector. 3. Margin update. How successful have companies been in passing along higher costs?

In this week's episode: 1. Our KBRA Altman default forecast. We'll dig into the model's outcome. 2. A potential energy spike. The single biggest risk we see to credit markets. 3. JPMorgan Chase's loan loss reserve build. Should we worry?

In this week's episode: 1. Security. A new world order demands it, and it touches several sectors in credit markets. 2. Sinking surveys. Watch what they do, not what they say is being tested. 3. Corporate pricing power. Watch out for consumers voting with their feet.

In this week's episode:1. Recession risk. It's rising. We lay out a timetable. 2. Homebuilder blues. How is this possible amid a chronic house shortage? 3. Jamie Dimon's letter. There's always a lot to unpack.