15 May 2017 by lberuti
Most of the earning season is now behind us on both side of the Atlantic. In the US, more than 90% of the S&P companies have now reported their Q1 results It has been a bright reporting season so far with 75% of companies beating analysts’ mean EPS estimates and 64% beating the mean sales estimate. The retail sector has not fared that well though. When most US retailers reported last week – a few are stll due like GPS ( Gap Inc ) on Thursday -, they all appear to suffer one way or another from slower foot traffic on online shopping. Over the last 5 trading sessions, in an otherwise fairly stable credit market - CDXIG is 1bp tighter at 62bps and CDX HY 5bps tighter at 324bps -, they have been the worst performing group and all without exception saw their risk premium increase. To name a few, M’s ( Macy’s Inc ) 5-year CDS traded 42.5bps wider at 272.5bps, JCP’s (J C Penney Company, Inc) 109bps wider at 880bps, JWN’s (Nordstrom, Inc) 19.5bps wider at 163.5bps, KSS’s (Kohl’s Corporation) 11bps wider at 238bps and GPS’s 11.5wider at 272.5bps.