Dec 5 - In a series of 26 sector-specific reports being published in the
next few days, Standard & Poor's Ratings Services analysts address the top 10
questions they are most frequently asked by investors throughout the world.
Managing Director David Tesher noted, in an overview article for the series
published earlier today, that there are some common themes that often came up
in the reports.
"Among the common themes are the U.S. "fiscal cliff" of federal spending cuts
and tax-relief expiration, and its potential to push the world's largest
economy back into recession; the chance that Europe's recessionary environment
and sovereign debt crisis will further curb growth across the continent; and
the possibility that decelerating growth and a hard landing in China's economy
will weigh on corporate revenues and profits for rated issuers with large
exposures to that country," he said.
He also points out that if Standard & Poor's downside scenarios for the U.S.
and Europe were to occur--with recession in one or both regions--cyclical
sectors would likely be hurt most. These include commodities, consumer
durables (including automobiles), and technology hardware and manufacturing
equipment for businesses. Leisure, lodging, airlines, advertising, non-staple
product retailers, and restaurants are also exposed to cutbacks in
discretionary corporate and consumer spending. Weaker speculative-grade
issuers in these industries would be most at risk of negative rating actions
under these scenarios.
"As it stands, we see the risk of the U.S. falling into another recession in
the next 12 months at just 15%-20%," noted David Wood, managing director and
co-author of the overview report. "In our base case, our economists forecast
GDP growth next year of 2.13%, up from the 1.8% we previously projected.
Additionally, we think it unlikely the country will go over the fiscal cliff,
assigning only a 15% likelihood of this occurring."
"On the other hand, we assume Europe's economy will stagnate in 2013, with our
base-case forecast assuming no GDP growth in the eurozone," Mr.Wood continued.
"We expect the economies of Spain, Portugal, Greece, and Ireland to actually
contract next year, and project only slight growth in the larger economies of
Germany, France, and the U.K. Our downside forecast, which we see as having a
40% chance of occurring, is that recession in the eurozone will extend into
"Top Ten Investor Questions For 2013" reports will be published for the
-- Global Power
-- Global Packaging
-- Global Auto and Truck
-- Global Building Materials
-- Global Capital Goods
-- Global Real Estate
-- Global Forest Prods
-- Global Metals and Mining
-- Global Hi-Tech
-- Global Retail
-- Global Transportation
-- Global Transportation Infrastructure
-- Global Pharmaceuticals
-- Global Media and Entertainment
-- Global Leisure
-- Global Consumer Prods
-- Global Chemicals
-- Global Leveraged Finance
-- Global Telecom and Cable
-- Global Infrastructure
-- Global Oil and Gas
-- Global Aerospace and Defense
-- U.S. Health Care
-- U.S. Environmental Services
-- Canadian Nonfinancial Corporations
-- Latin American Credit
The reports are available to subscribers of RatingsDirect on the Global Credit
Portal at www.globalcreditportal.com. If you are not a RatingsDirect
subscriber, you may purchase copies of these reports by sending an e-mail to
email@example.com. Ratings information can also be found
on Standard & Poor's public Web site by using the Ratings search box located
in the left column at www.standardandpoors.com. Members of the media may
request copies of these reports by contacting the media representative
provided or e-mailing firstname.lastname@example.org.