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2018 – Volatile Equity and Credit Markets; 2019 Outlook Across the Street

By Vy Phan

December 30, 2018


This week we highlight in the links below the 2019 forecasts across the street. We also summarize PeerIQ’s offerings so you can stay one step ahead of the US consumer.

2018 was a volatile year for equity and credit markets, particularly in the fourth quarter. The S&P500 is down ~7.5% for the year, and cyclical stocks are down more. CDX IG spreads have widened ~40 bps and CDX HY spreads have widened ~150bps.

ABS markets enjoyed record issuance. However, spreads widened, and all-in yields were higher leading to rate increases for borrowers and tighter margins for lenders. 2019 is shaping up to be a pivotal year in this late economic cycle. Synchronized global growth could turn into a synchronized slowdown. The risk of policy error is heightened as the Fed navigates record low unemployment and a slowdown in growth. The US yield curve has partially inverted and the all-important 3-month – 10-year yield spread is at ~37 bps. We will continue to keep an eye on these developments in 2019.

On behalf of PeerIQ, we wish you a very happy and prosperous new year!

PeerIQ’s Research Offerings

Below we summarize our public and premium research offerings. PeerIQ offers both public open-access research (such as this newsletter), and paid research such as the consumer credit digest. The research offerings are built on our subscription-as-a-service data & analytics platform – designed for risk managers and investors looking to stay one step ahead of the US consumer.

Consumer Credit Digest – Get an Edge on US Consumer Credit

 Looking for insights into how consumer credit has performed during prior periods of market volatility? How are US consumers performing today across asset classes? How are prepayments and losses trending in the personal loan and subprime auto space?

 The Digest, published monthly and powered by the TransUnion credit file, is a detailed market report and summary data that allows the reader to track trends in consumer credit with the following features:

·        Robust data & coverage, representing the full credit file back to 2000

·        Custom metrics and charts, including refinance and attribute migration

·        Key stratifications, including risk, age, originator type (e.g. Fintech)     

Source: PeerIQ

 Download a free trial version of the report or contact to learn more. The report is also available in PDF format.  


PeerIQ’s Loan Performance Monitor

Our MPL Loan Performance Monitor tracks the delinquency rates, cumulative losses, cumulative prepays and transition matrices using public marketplace lending data that comprises unsecured consumer loans originated by Marketplace Lenders. This report is published monthly. Some highlights from the latest (as of September 2018) report are:

·       Delinquencies on the 2017 vintage in the first 20 months are the highest that we have seen across vintages

·       Cumulative loss rates continue to edge higher

·       Cumulative prepayments have picked up, with the 2017 vintage paying significantly faster

Source: PeerIQ


PeerIQ’s Marketplace Lending Securitization Tracker

Our Quarterly Securitization Tracker analyzes securitizations of marketplace lending loans. Securitization markets have become a large source of financing for MPL issuers.

The tracker looks at growth in volume, new originators and deal structures and at how existing deals are performing. The tracker lists ratings upgrades, trigger breaches and compares new deals issued in the quarter. You can download the latest Q32018 tracker below. We will publish our 2018Q4 just after the quarter closes.

Source: PeerIQ


PeerIQ’s Lending Earnings Insights Report

On a quarterly basis, following earnings announcements, we analyze lender performance with a focus on credit performance trends and forward-looking commentary. We analyze data across three main lender segments: (1) FinTechs & Non-Banks, (2) Large banks, and (3) Card Issuers.

Below are some highlights from our latest report:

·       We are in the late stages of the credit cycle

·       CEOs of banks and card issuers are sanguine on the economy but are nonetheless taking precautions

·       Delinquencies and charge-offs in FinTech asset classes are near all-time lows

·       Loan loss provisions have been a tale of two cities. Large banks, except GS, are reducing provisions, while card issuers are increasing them.

·       Banks and credit card issuers are catching up in technology spending

Source: PeerIQ

Industry Update

Lighter Fare: