In today’s briefing:
- The Corporate Interest Burden – It’s All About Earnings!
- 5 Things We Watch: Recession, Gasoline, Temperatures, Geopolitics and Portfolio
- CPI watch: 6 charts on a soft’ish inflation report
The Corporate Interest Burden – It’s All About Earnings!
- Although high interest rates may not immediately lead to debt servicing issues for companies, each month that elevated yields prevail will significantly impact the ratio between profits and debt servicing.
- The good news is that the maturity wall, the ‘timetable’ for debt refinancing, is unlikely to cause much volatility.
- However, companies must continue generating enough income to cover the (higher) interest payments. But our bellwether earnings indicator points to a significant drop in profits in the coming quarters.
5 Things We Watch: Recession, Gasoline, Temperatures, Geopolitics and Portfolio
- This week we are watching out for the following 5 topics within global macro: Recession, Gasoline, Temperatures, Geopolitics, Portfolio
- As we start to see recessionary signs pop up in the US economy we’ll outline our recession playbook.
- As we have talked about before we see manufacturing continuing its rebound into Q4 due to restocking.
CPI watch: 6 charts on a soft’ish inflation report
- The CPI report is like to surprise on the dovish side. Especially used cars and transportation services will surprise on the low side.
- The Fed is very uncommitted to hiking rates here. The USD story could take a short-term beating on a weak CPI
- The US inflation report in August turned out to be “hot” due to sharp increases in gasoline -and diesel retail prices, as we anticipated.
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