• The high yield (HY) market was down sharply in March 2020 by about 11.5% (Bloomberg Barclays US Corporate High Yield Index). Markets are experiencing a major bifurcation within credit quality buckets, with many BB-rated companies holding their value, while many lower-rated CCC bonds are being priced for default.
  • The energy industry is one of the most impacted sectors, and one of the biggest contributors to extreme sector valuations.
  • We are anticipating a severe drop in both National Income and Product Accounts (NIPA) and S&P 500® profits in the second and third quarters of 2020 – perhaps 30% or more.