1. The corporate downgrades and defaults are slowly rising. To put the current corporate environment in perspective, we reviewed the United States corporate default since 2020.
– Moody’s estimates that credit conditions in 2025 will be challenging enough that the realized… pic.twitter.com/opYe22beKh
— Unicus (@UnicusResearch) May 16, 2025
2 (a) – Distressed defaults are detrimental to equity markets. But, there is a disconnect (we will discuss that later).
– distressed debt ratio is an indicator of future default activity because markets anticipate notable changes in default trends several months before they…
— Unicus (@UnicusResearch) May 16, 2025
3. We have been reviewing corporate defaults since 2020 and have observed an interesting trend are increasing steadily.
-To put things in perspective, in 2020, the US speculative-grade corporate default rate was 6.63%.
-Overall credit quality in the U.S. worsened in 2023, with… pic.twitter.com/kCBhTJLiTN
— Unicus (@UnicusResearch) May 16, 2025
5. For FY 2025, corporate default is expected to spike more than 8% (per Moody's).
Here are the warning signs for two major sectors: https://t.co/yeXas6Et4Y pic.twitter.com/4487VbjZ4e
— Unicus (@UnicusResearch) May 16, 2025
US auto loan serious delinquencies are rising at an alarming pace:
The share of auto loan balances at least 90 days past due hit 5.0% in Q1 2025, the most since the 2020 peak.
This is also slightly below the post-2008 peak of 5.2%.
Transitions into a delinquency of 30+ days… pic.twitter.com/QdpTfPfld0
— The Kobeissi Letter (@KobeissiLetter) May 17, 2025