“As the global recession takes hold, earnings and cash flow will be much lower,” analysts at Janus Henderson said in the report. Although companies cut dividends and share buybacks, “the loan needs will be very large this year,” they continued.
Why it matters: More debt is not necessarily a bad thing, and businesses need access to credit to fuel economic recovery. The biggest concern is whether they can keep payments to investors, Janus Henderson said.
See here: The high-yield issue hit a record high in June, Meyer told my CNN Business colleague Hanna Ziady.
On the radar: Corporate debt will be a focal point of the earnings season as reports begin this week.
Citigroup’s Hans Lorenzen said in a recent note to clients that he expects to know that European companies borrowed € 450 billion ($ 510 billion) between March and May, almost three times more than they borrowed during the same three months. in 2019.
Debt could be even higher in the United States. Janus Henderson notes that American companies now owe almost half of the world’s net corporate debt, both because of their global scale and because of a greater willingness to borrow.
Why Netflix Stocks Are Still Popular
Driving the rally: Friday’s jump came after Goldman Sachs raised its Netflix target price to $ 670 a share, the highest on Wall Street, reports my CNN Business colleague Paul R. La Monica.
Analyst Heath Terry believes Netflix will report stronger-than-expected subscriber growth when it posts earnings later this week. He forecasts an increase of at least 12.5 million net subscribers, compared to the consensus estimate of approximately 8.1 million. Netflix had nearly 183 million global subscribers at the end of the March quarter.
Terry said he believes Netflix still has plenty of room to grow, as people spend less on traditional cable TV, theater launches and other live events, freeing up money for streaming services.
“While the thesis ‘if you have not yet subscribed, you never will’ is easy rhetoric, it fails to capture the reality of … a radically changing world that is driving change in every corner of consumer behavior.” I told the clients.
Not everything is rosy: Netflix is still worried about the future. While the company’s 2020 list of series and movies was filmed largely before the pandemic, 2021 could be more complicated if the virus continues to thwart production. You should also be on the lookout for increased competition from Disney + and Apple TV +.
Oil production could increase again in August
Oil producers are prepared to increase production in August. But is the demand stable enough to deserve such a move?
That’s the big question from investors ahead of an OPEC committee meeting this week. The cartel is expected to recommend a reduction in supply cuts that have been supporting prices, according to media reports.
The image of demand has improved since April, when producers agreed to cut production by 9.7 million barrels per day, as strict shutdown orders forced people to stay at home.
But the IEA also warned that accelerating Covid-19 cases in many parts of the world poses a great risk to the picture.
Investor insight: Oil prices fell on the news Monday, with Brent crude futures, the global benchmark, declining 1.5% to $ 42.61 a barrel.
“While the evidence suggests that we have overcome the oil slump and that supply and demand are rebalancing, headwinds remain in the short term,” said Stephen Innes, chief global markets strategist at AxiCorp, in a note. to the clients.
Until next time
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