Special Events Are in Late-Cycle Mode (Capital Markets Research)

WEEKLY MARKET OUTLOOKJANUARY 21, 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.Special Events Are in Late-Cycle ModeCredit Markets Review and Outlook by John Lonski Special Events Are in Late-Cycle Mode. ¯ FULL STORY PAGE 2Topic of the Week returns soonThe Week Ahead We preview economic reports and forecasts from the US, UK/Europe, and Asia/Pacific regions. ¯ FULL STORY PAGE 6 The Long View Check our chart here for forecast summaries of key credit market metrics. Full updated stories, Amid the volatile start to 2016, investment-grade bond issuance has held up much better than high-yield bond offerings, begin on page 17.¯ FULL STORY PAGE 17Ratings Round-Up by Njundu Sanneh Downgrades Reflect Default Risks.¯ FULL STORY PAGE 20Market Data Credit spreads, CDS movers, issuance.¯ FULL STORY PAGE 22Moodys Capital Markets Research recent publications Links to commentaries on: Exxon, Chevron, M&A, China, COP, Total, falls and hikes, Shell, bank risk, sov risk, liquidity, Stressed EDF, risk, spreads, CHK. ¯ FULL STORY PAGE 26Credit SpreadsInvestment Grade: Year-end 2016 spread to be less thanits recent 177 bp. High Yield: Recent spread of 800 bp may approximate 695 bp by year-end 2016. Defaults US HY default rate: December 2015, 3.2%; MoodysCredit Policy Group forecasts 4.2% by November 2016.Issuance For 2016, US$ IG bond issuance may dip by -0.3% to $1.321 trillion, while US$ HY bond issuance may drop by -16.7% to $293 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 david.munves@moodys.com John Lonski 1.212.553.7144 john.lonski@moodys.com Ben Garber 1.212.553.4732 benjamin.garber@moodys.com Njundu Sanneh 1.212.553.4036 njundu.sanneh@moodys.com Yukyung Choi 1.212.553.0906 yukyung.choi@moodys.com Irina Baron 1.212.553.4307 irina.baron@moodys.com Franklin Kim 1.212.553.4419 franklin.kim@moodys.com Xian (Peter) Li1.212.553.1404 Xian.li@moodys.comMoody's Analytics/Europe: Tomas Holinka +420 ( 221) 666-384 Tomas.holinka@moodys.comMoody's Analytics/Asia-Pacific: Alaistair Chan +61 (2) 9270-8148 Alastair.chan@moodys.com Jack Chambers +61 (2) 9270-8111 Jack.chambers@moodys.comEditor Dana Gordon 1.212.553.0398 dana.gordon@moodys.comCAPITAL MARKETS RESEARCH2 JANUARY 21, 2016 CAPITAL MARKETS RESEARCH, INC. / MARKET OUTLOOK / MOODYS.COMCredit Markets Revi...