U.S. Corporate Profits and 10Y-3M Yield Curve

U.S. Corporate Profits and 10Y-3M Yield Curve While the divergence between large-cap profits and the rest of the economy is the widest on record, the steepening yield curve suggests an earnings rebound. Image: BofA Global Research

U.S. Corporate Profits vs. Assets

U.S. Corporate Profits vs. Assets U.S. corporate profits are near 20-year lows relative to fixed assets. The alternative to a recovery in corporate profits is the increasing risk of recession. Image: BofA Global Research

U.S. Corporate CCC-Rated Bonds Diverge During Trade War

U.S. Corporate CCC-Rated Bonds Diverge During Trade War As the chart suggests, CCC-rated bonds are not the canary in the coal mine. The divergence in option-adjusted spreads between CCCs and higher-rated issues reflects the impact of the US-China trade war. Image: Arbor Research & Trading LLC

U.S. Corporate Profits vs. S&P 500 EPS

U.S. Corporate Profits vs. S&P 500 EPS The current divergence between large-cap profits and the rest of the economy is the widest on record. It is possible to close the gap “down” (recession) or “up” (reflation). Image: BofA Global Research

U.S. Corporate Leverage

U.S. Corporate Leverage U.S. corporate leverage is high and close to its previous peak on a net debt to EBITDA. Image: Goldman Sachs Global Investment Research

U.S. Corporate Bond Ownership

U.S. Corporate Bond Ownership More than 25% of U.S. corporate bonds are held by insurance companies. Many investment grade investors are not allowed to hold junk-rated bonds. Any drop in the credit ratings could amplify the next recession. Image: NBF Economics and Strategy

U.S. and Euro Area Composition of Corporate Credit

U.S. and Euro Area Composition of Corporate Credit Great chart showing that the U.S. is a market-based financial system, while the Euro Area is a bank-based system with 80% of bank loans. Image: Deutsche Bank Global Research