Take Cover If Defaults Climb Through 2017 (Capital Markets Research)

WEEKLY MARKET OUTLOOKSEPTEMBER 1, 2016CAPITAL MARKETS RESEARCHTake Cover If Defaults Climb Through 2017 Credit Markets Review and Outlook by John Lonski Take Cover If Defaults Climb Through 2017.¯ FULL STORY PAGE 2The Week Ahead We preview economic reports and forecasts from the US, UK/Europe, and Asia/Pacific regions. ¯ FULL STORY PAGE 6The Long View Check our chart here for forecast summaries of key credit market metrics. Full updated stories, The issuance of US$ investment-grade and high-yield bonds posted record highs for August, begin on page 12.¯ FULL STORY PAGE 12Ratings Round-Up by Njundu Sanneh Mainly Downgrades in the US; Europe Quiet.¯ FULL STORY PAGE 16Market Data Credit spreads, CDS movers, issuance.¯ FULL STORY PAGE 22Moodys Capital Markets Research recent publications Links to commentaries on: Mexico, stability, retail, Portugal, overvalued, Pakistan, productivity, gold, Venezuela, economy, Italy, pricey, borrowing, Turkey, shareholders, Brexit, yields, bondholders.¯ FULL STORY PAGE 26Credit SpreadsInvestment Grade: Year-end 2016 spread to be close to its recent 141 bp. High Yield: After recent spread of 522 bp, it may approximate 600 bp by year-end 2016. Defaults US HY default rate: after July 2016s 5.5%, Moodys CreditPolicy Group forecasts 6.3% by Q4 2016.Issuance For 2016, US$-denominated IG bond issuance may increase by 6.1% to a record $1.407 trillion, while US$-priced high-yield bond issuance may sink by -12.5% to $310 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 Alaistair.Chan@moodys.com Emily Dabbs +61 (2) 9270-8159 Emily.dabbs@moodys.comEditor Dana Gordon 1.212.553.0398 dana.gordon@moodys.comMoodys 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.CAPITAL MARKETS RESEARCHCredit Markets Review and OutlookCredit Markets Review and O...