Assessing the Damage Paid Members Public
* Digging under the surface, we think markets are giving some important late-cycle messages. In short, any hint of an early-cycle re-acceleration is gone with sectors most sensitive to weakening credit, rising rates, and a slowing consumer rolling over– such as small-caps, banks, and consumer stocks. * In credit, IG yields are
UAW Strike: Shock Wave or Ripple? Paid Members Public
The UAW’s contract with the Big 3 (Ford, GM, Stellantis) ended on 9/14/23 and targeted strikes began that day. Contract negotiations cover ~146k workers across the companies. In this week’s note we discuss the key facts, impacts to the auto makers and their supply chain. Given
The Haves and Have Nots Paid Members Public
Summary * We often hear about the health of balance sheets, yet corporate, consumer and CRE defaults are all rising, now likely beyond the point of just ‘normalization,’ despite historically low unemployment. In our view, aggregate macro data at times misses the bifurcation under the surface that will impact defaults (and
Closed End Funds: An Overview, Risks and Opportunities Paid Members Public
Summary * Given how much rates have risen, the Closed End Fund (“CEF”) asset class is becoming more interesting. We walk through CEFs in detail, discussing their structure, how they trade, ways they differ from mutual funds or ETFs, highlight some risks facing this sector, and end with a few recommendations.
Duration On Sale Paid Members Public
Summary * The equity market is arguably becoming MORE overvalued vs bonds, even as prices fall, because rising rates are offsetting lower P/Es. That said, we think stocks will ultimately need to see the impact of those higher rates (i.e., slower growth/ lower earnings) before declining in a much
Yellow Corp ("YELLQ"): A Ch.11 Liquidation With Multiple Moving Pieces Paid Members Public
Chapter 11 & Pre-Petition Equity On August 6, 2023, Yellow Corporation filed for Chapter 11 under the US Bankruptcy code, case# 23-11069. For case information, a list of advisors, and all public documents you can visit the case management website here. Given a long history of liquidity and union problems
Cap Rate Primer: Definitions, Calculations & Return Implications Paid Members Public
Summary * Capitalization Rates, or Cap Rates, are frequently used by real estate investors as a valuation tool. Simply, the formula is Net Operating Income / Property Value. This measure is used to compare across individual properties and/or sectors such as REITs. We break down both the numerator (Net Operating Income)
Bank Stocks, Charts & Data: 2Q23 Paid Members Public
The Banking Sector In Charts Now that banks have reported 2Q23 earnings and filed their 10Qs, we present fundamental data across the sector, in chart form. Held To Maturity ("HTM") Securities Starting with HTM portfolios, we note that since 6/30/23 (for most banks, this is their
