Aging Boomers May Stymie Trumponomics (Capital Markets Research) - Moody's Capital Markets Research

Aging Boomers May Stymie Trumponomics (Capital Markets Research)

Aging Boomers May Stymie Trumponomics (Capital Markets Research) - Moody's Capital Markets Research
Aging Boomers May Stymie Trumponomics (Capital Markets Research)
Published Nov 10, 2016
31 pages — Published Nov 10, 2016
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WEEKLY MARKET OUTLOOKNOVEMBER 10, 2016CAPITAL MARKETS RESEARCHMoodys Analytics markets and distributes all Moodys Capital Markets Research, Inc. materials. Moodys Capital Markets Research, Inc is a subsidiary of Moodys Corporation. Moodys Analytics does not provide investment advisory services or products. For further detail, please see the last page.Aging Boomers May Stymie TrumponomicsCredit Markets Review and Outlook by John Lonski Aging Boomers May Stymie Trumponomics. ¯ FULL STORY PAGE 2Topic of the Week by Ben Garber Will Italy Get Trumped?¯ FULL STORY PAGE 5The Week Ahead We preview economic reports and forecasts from the US, UK/Europe, and Asia/Pacific regions. ¯ FULL STORY PAGE 8The Long View Check our chart here for forecast summaries of key credit market metrics. Full updated stories, A fundamentally questionable jump by Treasury bond yields may curb corporate bond issuance, begin on page 19. ¯ FULL STORY PAGE 19Ratings Round-Up by Njundu Sanneh Good Show in Europe, Not in the US.¯ FULL STORY PAGE 23Market Data Credit spreads, CDS movers, issuance.¯ FULL STORY PAGE 25Moodys Capital Markets Research recent publications Links to commentaries on: Lebanon, inflation, defaults, Italy, shareholders, DB, Saudi, M&A, subpar, Thailand, BP plc, UK, Allstate, ratings, OPEC, Fed, leverage, Greece, worries, ECB, defaults, EDFs.¯ FULL STORY PAGE 29Credit SpreadsInvestment Grade: Year-end 2016 spread to be close to its recent 137 bp. High Yield: After recent spread of 508 bp, it may approximate 550 bp by year-end 2016. Defaults US HY default rate: after October 2016s 5.6%, MoodysCredit Policy Group forecasts it near 4.1% by the summer of 2017. Issuance For 2016, US$-denominated IG bond issuance may increase by 6.8% to a record $1.416 trillion, while US$-priced high-yield bond issuance may sink by -5.0% to $336 billion.Click here for Moodys Credit Outlook, our sister publication containing Moodys rating agency analysis of recent news events, summaries of recent rating changes, and summaries of recent research.Moodys Capital Markets Research, Inc.Weekly Market Outlook Contributors: David W. Munves, CFA 1.212.553.2844 John Lonski 1.212.553.7144 Ben Garber 1.212.553.4732 Njundu Sanneh 1.212.553.4036 Yukyung Choi 1.212.553.0906 Irina Baron 1.212.553.4307 Franklin Kim 1.212.553.4419 Xian (Peter) Li1.212.553.1404's Analytics/Europe: Tomas Holinka +420 ( 221) 666-384 Tomas.holinka@moodys.comMoody's Analytics/Asia-Pacific: Emily Dabbs +61 (2) 9270-8159 Emily.Dabbs@moodys.comEditor Dana Gordon 1.212.553.0398 dana.gordon@moodys.comCAPITAL MARKETS RESEARCH2 NOVEMBER 10, 2016 CAPITAL MARKETS RE...

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TitleStarting PageNumber of Pages
The Week Ahead11
The Long View11
Ratings Round-Up by Njundu Sanneh11
Good Show in Europe, Not in the US.11
Market Data11
Moody s Capital Markets Research recent publications11
Weekly Market Outlook Contributors:11
Credit Markets Review and Outlook23
  Older workforce may keep 10-year Treasury yield under 3% to 5% range21
  Equity rally helps to drive benchmark yields sharply higher32
Topic of the Week By Ben Garber, Economist, Moody s Capital Markets Research, Inc.53
  Italian risk measures shift higher51
  The economic upside is limited61
  Radical change still awaits the banking sector71
The Week Ahead US, Europe, Asia-Pacific811
  THE US81
    Friday, November 1181
  University of Michigan Consumer Sentiment November Preliminary81
    Time: 10:00 am81
    Forecast: 88.081
    Sentiment in the Michigan survey in November is projected to be little changed from October s year-to-date low. This preliminary reading on consumer attitudes may be revised higher at the end of November as the election fades from view. Such an outc...81
    Tuesday, November 1581
  Import Price Index October81
    Time: 8:30 am81
    Forecast: 0.3%81
    Import prices are projected to rise for the second straight month in October, bringing the index nearly even with the year-ago level. Yet in September the Import Index still trailed 2012 s cycle high by 16%, as long-term commodity cost pressures have...81
  Retail Sales October81
    Time: 8:30 am81
    Forecast: 0.6% overall, 0.5% ex auto81
    Retail sales in October look to equal September s hearty 0.6% monthly gain. Sales are supported by wage gains, with the 2.8% yearly change in average hourly earnings in October representing the fastest pace in seven years. Yet that rate of wage grow...81
  Business Inventories September81
    Time: 10:00 am81
    Forecast: 0.2%81
    Business inventories are forecast to grow steadily in September, as the economic drag from the reduced pace of stockpiling appears to have ended. Inventories were initially estimated to have added 0.6% to real GDP growth last quarter after subtractin...81
    Wednesday, November 1681
  Producer Price Index October81
    Time: 8:30 am81
    Forecast: 0.3% overall, 0.2% core81
    Some uplift in fuel costs are expected to lead a sturdy gain in the October Producer Price Index. Past deflationary trends in commodity costs are fading out as the PPI rose 0.7% yearly to September after annual declines were recorded in most of the p...91
  Industrial Production &Capacity Utilization October91
    Time: 9:15 am91
    Forecast: 0.2% industrial production, 75.5% capacity utilization91
    Industrial production can creep higher in October amid limited signs of rising industrial sector demand. The ISM Manufacturing Index reading on new orders has held in positive territory for two straight months, yet it shows only modest growth with th...91
  NAHB Housing Market Index November91
    Time: 10:00 am91
    Forecast: 6391
    Builder confidence can hold firm in November as tight inventories are lifting demand for new homes. The NAHB reading on projected sales rose to the yearlong high of 72 in October, giving construction firms reason to scale up their operations. With t...91
    Thursday, November 1791
  Housing Starts &Building Permits October91
    Time: 8:30 am91
    Forecast: 1.16 million starts, 1.19 million permits91
    Housing starts are expected to leap higher in October after September s disappointing 18-month low. Building permits hint of a turnaround in construction activity after rising 13% annualized in the third quarter. Though multi-family building is cont...91
  Consumer Price Index October91
    Time: 8:30 am91
    Forecast: 0.4% overall, 0.2% core91
    Higher gasoline costs may lead the Consumer Price Index in October to equal the largest monthly increase of the past three years. The extended period of minimal prices gains might be over after the CPI failed to grow faster than 1.5% annually in near...91
    Friday, November 1891
  Leading Economic Indicators October91
    Time: 10:00 am91
    Forecast: 0.1%91
    Encouraging labor market trends can push the Leading Economic Indicators Index higher for the second consecutive month in October. Sustained gains in the labor market participation rate among prime-age workers this year is a great sign that improved ...91
    Friday, November 11101
  Germany: Consumer Price Index (October; 7:10 a.m. GMT)101
    Monday, November 14111
  Euro Zone: Industrial Production (September; 10:00 a.m. GMT)111
    Tuesday, November 15111
  Germany: Preliminary GDP (Q3, 7:10 a.m. GMT)111
  Italy: Preliminary GDP (Q3, 9:00 a.m. GMT)111
  U.K.: Consumer Price Index (October; 9:30 a.m. GMT)111
  Euro Zone: External Trade (September; 10:00 a.m. GMT)121
    Wednesday, November 16121
  U.K.: Employment Situation (September; 9:30 a.m. GMT)121
    Thursday, November 17121
  France: Employment Situation (Q3; 8:00 a.m. GMT)121
  U.K.: Retail Sales (October; 9:30 a.m. GMT)121
  Euro Zone: Consumer Price Index (October; 10:00 a.m. GMT)131
    Friday, November 18131
  Russia: Unemployment (October; 2:00 p.m. GMT)131
    Thursday, November 10131
  New Zealand Monetary Policy November131
  Japan Machinery Orders September141
  Australia Housing Finance September141
  China Monetary Aggregates October141
  Philippines Industrial Production September141
    Friday, November 11141
  Malaysia GDP 2016Q3141
  Malaysia Industrial Production September141
  Japan Industry Activity Indexes September151
  Hong Kong GDP 2016Q3151
  India Consumer Price Index October151
  India Industrial Production September151
  South Korea Monetary Policy November151
    Saturday, November 12151
  China Fixed Asset Investment October151
  China Industrial Production October161
  China Retail Sales October161
    Monday, November 14161
  Japan GDP 2016Q3161
  China Fixed-Asset Investment October161
  China Industrial Production October161
  China Retail Sales October161
  India Wholesale Price Index October161
    Tuesday, November 15171
  China Foreign Direct Investment October171
  India Foreign Trade October171
  New Zealand Retail Trade 2016Q3171
  Indonesia Foreign Trade October171
    Wednesday, November 16171
    Thursday, November 17171
  Australia Employment Situation October171
  Singapore Foreign Trade October171
  Philippines GDP 2016Q3181
    Friday, November 18181
The Long View194
  Credit spreads191
  The recent high-yield bond spread of 508 bp is somewhat less than what is predicted by the spread s macroeconomic drivers and the high-yield EDF metric, but it is wider than what might be inferred from a now below-trend VIX index. The implications for...191
  Through the first 45 weeks of 2016, US$-denominated corporate bond issuance showed year-over-year percent changes of a 6.3% increase for investment-grade and a -7.9% drop for high-yield. US economic outlook201
  Asia Pacific212
Ratings Round-Up231
Ratings Round-Up231
Ratings Round-Up241
Market Data254
Moody s Capital Markets Research recent publications293

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Moody's Capital Markets Research. "Aging Boomers May Stymie Trumponomics (Capital Markets Research)" Nov 10, 2016. Alacra Store. Sep 23, 2020. <>
Moody's Capital Markets Research. (2016). Aging Boomers May Stymie Trumponomics (Capital Markets Research) Nov 10, 2016. New York, NY: Alacra Store. Retrieved Sep 23, 2020 from <>
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