/ 2 Sep 2020
US Earnings Recap. Pershing Square Holding Ltd (PSH.LN), which is on our Top International Picks, published their letter to shareholders with their semi-annual financial statements and we wanted to highlight some key parts of the letter. As a brief background, Pershing Square is a publically listed closed-end fund that owns shares in some of the strongest businesses in the US (the largest holdings include: Chipotle, Lowe’s, Hilton, Restaurant Brands and Starbucks)
/ 24 Ago 2020
Bankruptcies signal HY default rate may approach 2009 peak. We looked at how US bankruptcies are leading indicators of US HY default rates in a comment earlier this year. In fact, two bankruptcy metrics, the Bloomberg monthly bankruptcy count (companies with liabilities of at least $100MM as reported by BCY Bloomberg function) and the NACM (National Association of Credit Managers) survey of expected bankruptcies, both reliably move about 5-6 months before the Moody’s annual HY default rate.
/ 17 Ago 2020
Vaccine May Not be A ‘Silver Bullet’: Markets Pricing in Most Positive Tail Risk. Over the next few months there are multiple possible outcomes regarding the resolution of the current COVID emergency, depending on how the monetary, fiscal and public health policies play out in the next few months. It appears that many markets are taking the view that both the vaccine and therapeutics may be available in a few months, which would lead to the normalization of life and economic activity in the US.
/ 10 Ago 2020
US Earnings Recap. Roughly 90% of the S&P 500 has now reported earnings and approximately 83% of the companies are reporting betterthan- expected earnings. This is so far the highest percentage of companies exceeding expectations since Factset started collecting the data in 2008. Relative to the consensus estimates, earnings in total are beating by ~10% (-34% vs -44%) versus the historical average of ~5%.