Recession

London — European dealmakers are struggling to finance corporate takeovers as concern that the region's economies may dip into recession is prompting debt ...

“A lot of fixed rate high yield investors have cash today, but are worried about outflows. Dealmakers say banks have become more selective in funding transactions. M&A financing packages are usually underwritten months in advance. This year US private equity firm Thoma Bravo has repeatedly bypassed traditional banks and turned to a group of private lenders including Owl Rock Capital, Blackstone, Apollo Global and Golub Capital to finance the $10.7bn purchase of enterprise software firm Anaplan in March. “You want to have a clear understanding of any pass-through issues like energy exposure or a potential drop in consumer demand,” said Simon Francis, head of debt financing in Europe, the Middle East and Africa (Emea) at Citi. A sterling tranche was priced at a deep discount of 93.45c to lure investors, with the banks also offering a higher yield than indicated at the start of marketing, a lead manager said. BNP Paribas and Nomura arranged a €345m floating-rate bond to finance the Biofarma buyout and ended up granting a large discount as well as tightening investor protections in the bond documentation to get the deal over the line, a document seen by Reuters shows. After a 10-week shutdown of the European high yield market, the longest since 2009, a pool of banks led by HSBC and Barclays launched an £815m bond sale in April to fund Apollo's takeover of British home builder Miller Homes. The banks — Goldman Sachs, BNP Paribas, Bank of America and Mizuho — had to place a chunk of its debt worth about £1bn at a discount of about 10% to be able to sell it to private lenders, the source said. If those are not enough to cover the increase in market rates, the debt gets syndicated at deep discounts with banks making up the difference, which may lead to a loss if it exceeds their fees. In Britain, supermarket chain Morissons' £7bn takeover by US buyout fund CD&R is the most notable deal to have hit a snag as the syndication of its debt pile has been delayed by about six months. While banks have agreed to provide the necessary financing, some are having to sweeten terms to find lenders willing to take on chunks of their debt.

Global economic uncertainty and market volatility triggered by the Russia-Ukraine war, coupled with monetary tightening from the Federal Reserve and the ...

"A lot of fixed rate high yield investors have cash today, but are worried about outflows. Dealmakers say banks have become more selective in funding transactions. M&A financing packages are usually underwritten months in advance. This year U.S. private equity firm Thoma Bravo has repeatedly bypassed traditional banks and turned to a group of private lenders including Owl Rock Capital, Blackstone, Apollo Global and Golub Capital to finance the $10.7 billion purchase of enterprise software firm Anaplan in March. A sterling tranche was priced at a deep discount of 93.45 cents to lure investors, with the banks also offering a higher yield than indicated at the start of marketing, a lead manager said. BNP Paribas and Nomura arranged a 345 million euro floating-rate bond to finance the Biofarma buyout and ended up granting a large discount as well as tightening investor protections in the bond documentation to get the deal over the line, a document seen by Reuters shows. After a 10-week shutdown of the European high yield market, the longest since 2009, a pool of banks led by HSBC and Barclays launched an 815 million pound bond sale in April to fund Apollo's takeover of British homebuilder Miller Homes. The banks - Goldman Sachs, BNP Paribas, Bank of America and Mizuho - had to place a chunk of its debt worth about 1 billion pounds at a discount of around 10% to be able to sell it to private lenders, the source said. If those are not enough to cover the increase in market rates, the debt gets syndicated at deep discounts with banks making up the difference, which may lead to a loss if it exceeds their fees. Lead banks who fully shouldered the Morrisons financing are now left with more than 3 billion pounds of debt yet to be syndicated, one source familiar with the discussions said. In Britain, supermarket chain Morissons' 7-billion-pound ($8.6 billion) takeover by U.S. buyout fund CD&R is the most notable deal to have hit a snag as the syndication of its debt pile has been delayed by about six months. While banks have agreed to provide the necessary financing, some are having to sweeten terms to find lenders willing to take on chunks of their debt.

Economic recessions are rare, but periods in which corporate profits fall for at least two consecutive quarters are not.

You may cancel your subscription at anytime by calling Customer Service. This isn’t to say that the country won’t experience another recession eventually, but with the Federal Reserve only recently moving to start tightening policy, and with the job market strong and household balance sheets in good shape, it might not come soon. Since 1948 there have only been a dozen of them, according to the National Bureau of Economic Research’s business cycle dating committee (the accepted arbiter of U.S. economic expansions and contractions), and in recent decades they have become less frequent.

An exceptionally robust job market. The Federal Reserve raising interest rates at a rapid clip. Overheated financial markets starting to correct themselves, ...

But when the market sentiment reverses, like it did 22 years ago and is doing now, it becomes more vulnerable to whatever bad news may arrive. - Pay more attention to corporate debt markets than the stock market. It was only in 2001 that the wheels started to come off the broader economy, as companies curtailed growth plans and layoffs became more widespread. - What's more, it was an unusually mild recession — and may not have been counted as a recession at all if the September 11, 2001 terrorist attacks hadn't happened. - Watch carefully whether corporate behavior starts to change outside the companies most directly affected by the stock market selloff and crypto collapse. IPOs were shelved, and the companies that had gone public saw their share prices dwindle.

On cue, global stocks and U.S. futures sank on Monday morning, with Bitcoin price tumbling below $30000.

Meanwhile, on Tuesday and Wednesday, investors will get the latest quarterly results from retail giants Home Depot, Lowe's, Walmart and Target. The base case is for the benchmark to close out 2022 at 4,300, a near-7% premium over Friday's close. Wall Street will be tuning into tomorrow's retail data numbers to see if the consumer truly is holding back on spending. Lloyd Blankfein, Goldman's former CEO, and current senior chairman, appears to be banking on the latter scenario. Hatzius, it should be noted, did not mention the R-word in his team's report. The worst case is far bleaker.

Goldman Sachs Senior Chairman Lloyd Blankfein remarks come after the firm cut the US growth forecasts for 2022 and 2023.

Goldman’s economic team expects US gross domestic product to expand 2.4 per cent this year, down from 2.6 per cent. (With inputs from agencies) (With inputs from agencies)

Companies and consumers should prepare for the worst, but Fed still has 'narrow path' for recovery, says Goldman's senior chairman, Lloyd Blankfein.

- Print Article - Order Reprints Goldman Sachs economists lowered their forecasts for U.S. economic growth this year and the bank’s senior chairman, Lloyd Blankfein, warned companies and consumers to prepare for recession.

Goldman Sachs Senior Chairman Lloyd Blankfein urged companies and consumers to gird for a US recession, saying it's a "very, very high risk."

"How comfortable are we now to rely on those supply chains that are not within the borders of the United States and we can't control?" A recession is "not baked in the cake" and there's a "narrow path" to avoid it, he said. With high fuel prices and a shortage of baby formula tangible measures of Americans' unease, US consumer sentiment declined in early May to the lowest level since 2011. While the slowdown will push up unemployment, Goldman was optimistic a sharp rise in joblessness can be avoided. "Do we feel good about getting all our semiconductors from Taiwan, which is again, an object of China." The report called this a "necessary growth slowdown" to help temper wage growth and reduce inflation back down toward the Fed's 2% target.

Goldman Sachs Senior Chairman Lloyd Blankfein urged companies and consumers to gird for a US recession, saying it's a “very, very high risk.".

“How comfortable are we now to rely on those supply chains that are not within the borders of the United States and we can’t control?" A recession is “not baked in the cake" and there’s a “narrow path" to avoid it, he said. With high fuel prices and a shortage of baby formula tangible measures of Americans’ unease, US consumer sentiment declined in early May to the lowest level since 2011. While the slowdown will push up unemployment, Goldman was optimistic a sharp rise in joblessness can be avoided. It's a narrow path. And there's- but, you know, there's a path.

Goldman Sachs also revised its year-end target for the S&P 500 to 4,300 from 4,700 due to higher interest rates and slower growth. It warned that it doesn't ...

A rally like we had on Friday is a good start, but in order to trust it to a greater extent we need a follow-through day later this week. That is not a very encouraging scenario, but it is important that we stay focused on the price action. A recession is not priced into this market, and worries about it continue to grow.

Former Goldman Sachs CEO Lloyd Blankfein said on Sunday he believes the economy is at risk of possibly going into a recession, as the U.S. Federal Reserve ...

It's hard to finely tune them, and it's hard to see the effects of them quickly enough to alter it, but I think they're responding well. Speaking on "Face the Nation" on CBS, Blankfein said a recession is "a very, very high risk factor." Former Goldman Sachs CEO Lloyd Blankfein said on Sunday he believes the economy is at risk of possibly going into a recession, as the U.S. Federal Reserve continues to raise interest rates to tackle rising inflation.

Portfolio investors have left their petroleum positions essentially unchanged for the last nine weeks as loss of production from Russia is matched by loss ...

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LONDON — Portfolio investors have left their petroleum positions essentially unchanged for the last nine weeks as loss of production from Russia is matched ...

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The good news is that Deutsche Bank sees the economy rebounding by mid-2024 as the Fed reverses course in its inflation fight.

If inflation does stay elevated, the Fed will be forced to consider more dramatic interest rate hikes. To make its case, Deutsche Bank created an index that tracks the distance between inflation and unemployment over the past 60 years and the Fed’s stated goals for those metrics. A recession is “not baked in the cake” and there’s a “narrow path” to avoid it, he said.

US stocks edged lower on Monday as investors gauge the risk of an economic recession. Former Goldman Sachs CEO Lloyd Blankfein said the US is at a "very, ...

The yield on the 10-year Treasury fell 3 basis points to 2.90%. The comments come amid a reckoning for the crypto industry following the implosion of Terra. Brent crude, oil's international benchmark, fell as much as 0.05% to $111.49. First-quarter earnings continue to roll in, with 91% of S&P 500 companies having already reported results. If I was a consumer, I'd be prepared for it," he said. - Goldman Sachs said in a note that the S&P 500 could fall another 11% in the event of a recession.

After an explosive start to the year, commodity prices pulled back this month as traders exited profitable positions to offset losses in other asset classes ...

Looking ahead, more big moves could be on the horizon amid heighten concerns that the Fed won’t be able to deliver a soft economic landing. There’s no denying it, that the Fed is caught in a box of its own making because it didn’t move quickly enough on raising rates last year. However, one thing we do know for certain is that global equity markets tend to get crushed once the Fed begins raising rates.

The worst-case scenario is far direr. It entails a full-fledged recession smashing the US economy, with stocks sliding another 10% to 3600 by the end of ...

ET hereby disclaims any and all warranties, express or implied, relating to the report and any content therein. The views expressed here are that of the respective authors/ entities and do not represent the views of Economic Times (ET). ET does not guarantee, vouch for or endorse any of its contents nor is responsible for them in any manner whatsoever. Lloyd Blankfeinappears to be betting on the latter possibility. This believes that corporations will be able to eke out profits as the economy slows. The worst-case scenario is far direr. Please take all steps necessary to ascertain that any information and content provided is correct, updated and verified.

Economic recessions are rare, but periods in which corporate profits fall for at least two consecutive quarters are not.

You may cancel your subscription at anytime by calling Customer Service. This isn’t to say that the country won’t experience another recession eventually, but with the Federal Reserve only recently moving to start tightening policy, and with the job market strong and household balance sheets in good shape, it might not come soon. Since 1948 there have only been a dozen of them, according to the National Bureau of Economic Research’s business cycle dating committee (the accepted arbiter of U.S. economic expansions and contractions), and in recent decades they have become less frequent.

With the stock market falling for the last six weeks in a row amid growing concerns about an economic slowdown and the Federal Reserve raising interest ...

Historically, when inflation is high and the Federal Reserve is working hard to quell it, recessions happen more often than not.” As the economy struggles to deal with “painfully high inflation,” which has “forced the Federal Reserve to go on high alert,” Zandi puts the odds of a recession at 33% in the next 12 months and nearly 50% within the next 24 months. With the stock market falling for the last six weeks in a row amid growing concerns about an economic slowdown and the Federal Reserve raising interest rates to combat inflation, an increasing number of Wall Street experts are warning of now “uncomfortably high” recession risks, with rising odds of a downturn within the next two years.

Former Goldman Sachs chief executive Lloyd Blankfein is warning there is a "very, very high risk" of recession -- and said if we was still running a "big ...

While the rate of inflation dropped marginally from 8.5% in March to 8.3% in April, it’s still squeezing everyday Americans. “Some of that is transitory, will go away … Eventually the war in the Ukraine will be over. Some of the supply chain shocks will go away, but some of it will be a little bit stickier and will be with us for a while,” he said.

Equity investors' anxiety about a potential recession isn't showing up in other parts of the market, which is giving JPMorgan Chase & Co. strategist Marko ...

The chief equity strategist for Morgan Stanley sees a 3400 level coming for the S&P 500, and writes the “risk of a recession has gone up materially.”

When Morgan Stanley’s report was first published, the S&P 500’s price-to-earnings (P/E) ratio was 21.5x, higher than at any point in history other than the dot-com bubble. It’s not the only investment bank worried about a recession. The S&P 500 posted its sixth straight week of losses for the first time since 2011 last week, despite a Friday relief rally. If Wilson is correct, his price target means the S&P 500 still has a roughly 15% drop ahead of it from Monday’s levels. “We remain confident that lower prices are still ahead,” Wilson wrote. On Monday, Wilson argued that the “risk of a recession has gone up materially,” and Morgan Stanley’s bear case now assumes the U.S. will fall into a recession by 2023 due to “sticky” inflationary pressures, sustained margin declines, and a broad deceleration in sales growth.

Goldman's economic team, led by Jan Hatzius, now expects U.S. gross domestic product to expand 2.4% this year, down from 2.6%. It reduced its 2023 estimate ...

While the slowdown will push up unemployment, Goldman was optimistic a sharp rise in joblessness can be avoided.Bloomberg With high fuel prices and a shortage of baby formula tangible measures of Americans' unease, US consumer sentiment declined in early May to the lowest level since 2011. The recession, saying it's a "very, very high risk." The report called this a "necessary growth slowdown" to help temper wage growth and reduce inflation back down toward the Fed's 2% target. A recession is "not baked in the cake" and there's a "narrow path" to avoid it, he said.

"Equity markets price in too much recession risk," Kolanovic said, highlighting that the US stock market has priced in a 70% chance of a recession.

He believes the stock market is pricing in too much recession risk, and that equities stand to recover in a big way if it doesn't materialize. "Equities stand to recover if a recession doesn't come through, given already substantial multiple de-rating, reduced positioning and downbeat sentiment," Kolanovic said. - "Equities stand to recover if a recession doesn't come through, given already substantial multiple de-rating," Kolanovic said.

The index has already plunged in recent weeks as concerns over sky-high inflation, rising interest rates and a darkening economic outlook continue to weigh ...

Still, he has warned that a soft landing – the sweet spot between cooling demand with crushing it and triggering a recession – is not assured. That would mark a steep, 25% decline from the beginning of the year. Goldman initially forecast that the S&P would close out the year at 5,100.

Goldman Sachs Senior Chairman Lloyd Blankfein urged companies and consumers to gird for a US recession, saying it's a “very, very high risk.”.

A recession is “not baked in the cake” and there’s a “narrow path” to avoid it, he said. “Do we feel good about getting all our semiconductors from Taiwan, which is again, an object of China.” With high fuel prices and a shortage of baby formula tangible measures of Americans’ unease, US consumer sentiment declined in early May to the lowest level since 2011. While the slowdown will push up unemployment, Goldman was optimistic a sharp rise in joblessness can be avoided. “How comfortable are we now to rely on those supply chains that are not within the borders of the United States and we can’t control?” Blankfein said. “If I were running a big company, I would be very prepared for it,” Blankfein said on CBS’s “Face the Nation” on Sunday. “If I was a consumer, I’d be prepared for it.”

The consensus among economists puts the odds of a recession starting sometime in the next year at 30%, according to Bloomberg's most recent survey.

But market pessimism has gotten ahead of itself and there is room for economic news to come in better than expected in the immediate year ahead. As of the fourth quarter, consumers needed to use only 14.0% of their after-tax incomes to meet their financial obligations, which are debt service payments plus rents and payments for car leases and similar costs. Yes, the growth in the M2 measure of the money supply has slowed recently, but the time lag between tighter money and slower economic growth should be at least twelve months. Second, tax rates haven't gone up and are increasingly unlikely to do so anytime soon. We think the near-term pessimism is overdone. No wonder the S&P 500 is deep in correction territory and flirting with an official bear market.

Wall Street is mixed about whether the U.S. is headed toward recession in 2022. Worth watching this week: Retail earnings. by: Kyle Woodley. May 16, 2022.

BCA Research notes that while there's negative news around the globe, "European benchmarks already discount a significant portion of the negative news." "We remain cautiously optimistic on shares as WRBY continues to show ability to grow the top line, open new stores, and is recession resistant as a lower cost option for non-discretionary spend," says CFRA Research analyst Zachary Warring (Buy). "We see the company leveraging SG&A to become profitable in the second half of 2022." This was much wider than the per-share loss of 3 cents the company reported in the year-ago period and missed the consensus estimate for breakeven on a per-share basis. JBLU followed up in early May with an "enhanced superior proposal," including paying a $200 million, or $1.80 per SAVE share, reverse break-up fee should regulators block the deal. Wells Fargo Investment Institute, for instance, says "our conviction is that the chances of an outright recession in 2022 remain low" but believes odds are growing that 2023 could see an economic contraction. The major indexes finished an up-and-down session with mostly weak results. TWTR stock has now given up all its gains since Musk announced his stake in the social platform. Revenue of $153.2 million also fell short of analysts' expectations. That opinion was met by a number of other calls Monday morning. Wedbush analyst Daniel Ives said the move feels more like a "'dog ate the homework' excuse to bail on the Twitter deal or talk down a lower price." Monday itself was a fairly quiet affair. "There's no crystal ball to predict what's next, but historical trends can come into play here.

Measures of demand -- consumer spending and business investment in equipment -- actually quickened at the start of 2022. The Federal Reserve Bank of Atlanta's ...

Recession fears have been growing recently as the Federal Reserve tightens monetary policy to help cool down inflation that's running near its hottest pace ...

The Federal Reserve Bank of Atlanta’s GDPNow estimate currently has second-quarter gross domestic product rising at a 1.8% pace. Measures of demand -- consumer spending and business investment in equipment -- actually quickened at the start of 2022. He’s in the middle of a $44 billion takeover attempt to buy Twitter Inc. and is pushing that social-media company for more details about of many of its claimed users are actually bots.

Recession fears have grown as the Federal Reserve tightens monetary policy to help cool inflation that's running near its hottest pace since the early ...

“This administration, just, it doesn’t seem to get a lot done,” Musk said, adding that he thought immigration policy needed to be addressed. He’s in the middle of a $44 billion takeover attempt to buy Twitter Inc. and is pushing that social-media company for more details about of many of its claimed users are actually bots. Measures of demand -- consumer spending and business investment in equipment -- actually quickened at the start of 2022.

In the former case, the dollar should be shorted against most currencies, with the bank particularly favoring commodity exporters like the Canadian dollar. In ...

With the stock market falling for the last six weeks in a row amid growing concerns about an economic slowdown and the Federal Reserve raising interest ...

Historically, when inflation is high and the Federal Reserve is working hard to quell it, recessions happen more often than not.” As the economy struggles to deal with “painfully high inflation,” which has “forced the Federal Reserve to go on high alert,” Zandi puts the odds of a recession at 33% in the next 12 months and nearly 50% within the next 24 months. With the stock market falling for the last six weeks in a row amid growing concerns about an economic slowdown and the Federal Reserve raising interest rates to combat inflation, an increasing number of Wall Street experts are warning of now “uncomfortably high” recession risks, with rising odds of a downturn within the next two years.

Increasing administrative capacity now, before the next recession, will allow for a stronger response. We learned that the federal government could deliver ...

We cannot be certain that Congress will always move as swiftly as it did in the spring of 2020. In the future, support for households should better reflect the state of the economy and the needs of households. Most households received a sizable one-time stimulus payment in the spring of 2021 when better targeted and persistent support would have been better. Of course, all that fiscal and monetary stimulus contributed to an unwelcome surge in inflation. For example, people who lose their jobs and receive unemployment benefits promptly spend much of the money they receive, boosting demand. While the lessons from this recession continue to unfold, the next recession may arrive sooner than we hope.

Former Goldman Sachs CEO Lloyd Blankfein warned of a high risk for a US recession, calling it a high risk factor, Markets Insider reported.

The richest man in the world made the comment at a Miami tech conference. Musk joked that an "economic enema" would eventually need to "clear out the pipes.

It's not the first time Musk has commented on a potential recession. US Federal Reserve Chair Jerome Powell spoke out against concerns the economy could be headed for a downturn after the Federal Reserve raised interest rates earlier this month. In April, Deutsche Bank economists predicted the US would hit a recession in 2023, citing inflation and higher interest rates. "This administration, it doesn't seem to get a lot done," Musk said. He has continually criticized the administration after the White House failed to invite Tesla to an EV summit and praised General Motors and Ford over Tesla. Earlier this year, Musk called Biden a "damp sock puppet in human form."

International Business News: Recession fears in US have been growing recently as the Federal Reserve tightens monetary policy to help cool down inflation ...

"This administration, just, it doesn't seem to get a lot done," Musk said, adding that he thought immigration policy needed to be addressed. He's in the middle of a $44 billion takeover attempt to buy Twitter Inc. and is pushing that social-media company for more details about of many of its claimed users are actually bots. The honest reason for inflation is that the government printed a zillion amount of more money than it had," Musk said, adding that countries including Venezuela had already been down the same path. Measures of demand -- consumer spending and business investment in equipment -- actually quickened at the start of 2022. The Federal Reserve Bank of Atlanta's GDPNow estimate currently has second-quarter gross domestic product rising at a 1.8% pace. "These things pass and then there will be boom times again," Musk told the All-In Summit in Miami Beach, according to a live-streamed video of his remarks posted by a Twitter user.

Rising US interest rates, sky-high oil prices, soaring inflation, a foreign war. Then, naturally, a recession. The trajectory may sound awfully familiar, ...

After experiencing annual growth of about 1.3 million barrels a day during the previous five years, oil demand grew just 670,000 barrels a day in 1990, then slowed further to 134,000 barrels a day in 1991. The average growth was similar before 2000, when oil consumption weakened to 724,000 barrels a day, followed by growth of 870,000 barrels a day in 2001. If that’s the case, oil demand may be weakened from the downturn, but it should still see annual growth. With Saudi production set to hit an annual all-time high in 2022, the kingdom can easily cut output in 2023 if needed. Back then, the world hadn’t seen two consecutive years of negative oil demand in a quarter of a century. In 2020, global oil demand plunged by nearly 10 million barrels a day — the biggest ever drop recorded. In 2008, it dropped by 1 million barrels a day, followed by another contraction of 1.1 million barrels a day in 2009. For the oil market, the key question isn’t if — or even when — American and European economic activity will slow and probably contract. Over the weekend, Lloyd Blankfein, the former head of Goldman Sachs Inc., warned consumers and businesses to brace for the “very, very high risk” of a recession in the next few months. Or will it resemble an epic cataclysm more like the crises of 2008-2009 and 2020? Yet the bears may be catastrophizing the true impact of a recession. Macro hedge funds are already betting that oil demand will crash and prices will drop.

Is the United States heading for a recession? If Goldman Sachs Senior Chairman Lloyd Blankfein is to be believed, then the chances are 'very, very high'.

Is the United States heading for a recession? However, he showed his faith towards Federal Reserve saying it is 'responding well' to the situation. The International Monetary Fund estimate a 3.7% GDP growth this year for the United States. The Conference Board, US has forecast that real GDP growth will slow to 1.5% in the first quarter of 2022. This real GDP will be down sharply from 6.9% growth in the last quarter of 2021. Federal Reserve recently raised interest rates for the first time since 2018, to a range of 0.25% to 0.50%.