Egan-Jones

The Egan-Jones Ratings Portal offers trusted credit ratings, research, and market tools. Explore the insights that matter today: https://www.egan-jones.io/ 

Walgreens Boots Alliance, once valued at over $100 billion, is in discussions with Sycamore Partners for a potential sale as it grapples with heavy losses following its investment in VillageMD. Image credit: AI Health Uncut

Sophisticated investors face a mix of challenges and opportunities over the next 12 months, from the disruption of legacy industries like automobiles and chips to geopolitical and economic pressures in regions like Western Europe and China. Key risks include AI-driven automation reshaping traditional sectors, rising energy demands conflicting with declining solar costs, and shifts in defense spending priorities. On the positive side, potential stabilization in U.S. debt growth, gradual recovery in commercial real estate, and moderating inflation and interest rates could offer relief. Explore these insights further in our latest Risk Commentary: https://lnkd.in/drG2GiPj #AI #AutoIndustry #Inflation Image credit: Bloomberg

Japan’s growing debt crisis has prompted government advisor Mana Nakazora to call on credit rating firms to issue warnings of potential downgrades to sovereign bonds. She believes such alerts could push policymakers to address deteriorating fiscal discipline. With a ¥13.9 trillion ($92 billion) stimulus package requiring significant bond issuance, Nakazora warns that Japan’s goal of achieving a primary balance surplus by 2025 is increasingly out of reach. Nakazora also criticized subsidies and handouts, urging greater public awareness of the long-term costs. As the BOJ nears an interest rate hike decision, she cautions that worsening fiscal conditions could complicate monetary policy. Credit rating firms, she suggests, have a vital role to play in sounding the alarm and driving reforms before it’s too late. #EganJones #JapanDebt #CreditRatings Image credit: CEIC Data 

Can credit ratings make EU bond markets more competitive? Big names like AFME, ICMA, and other leading industry groups believe so, and they’re urging the EU to follow the examples set by the US TRACE system and the UK FCA proposals. The challenge lies in addressing the fact that investment-grade (IG) corporate bonds face significantly more price volatility than high-yield (HY) bonds. Without a tailored approach, current transparency regimes may not provide the precision needed to support market efficiency. The proposed solution is integrating credit ratings into transparency frameworks. Credit ratings capture the differences in bond volatility, allowing for customized transparency levels that improve liquidity and better support issuers’ financing needs. Tools like ESMA’s European Rating Platform (ERP) could provide the foundation for this system, or the initiative could be driven by the industry itself through collaboration between investment firms and trading venues. By adopting this approach, the EU has the opportunity to modernize its bond markets, enhance liquidity, and remain competitive on the global stage. #EganJones #EUFinance #CreditRatings 

The 2024 election brought more than political surprises—it spotlighted the growing accuracy and relevance of prediction markets like Polymarket. These platforms outperformed traditional polling in forecasting outcomes, with $1.8 billion in trades predicting a Trump win (62% odds) and half a billion predicting Harris to win the popular vote (73%) by the morning of the election. What’s driving this shift? 👉 The maturation of blockchain technology  👉 Supportive regulatory trends  👉 Connection to international markets Platforms like Polymarket and Kalshi are gaining traction, and we may soon see competition or partnerships with established sportsbooks like FanDuel and DraftKings Inc. Prediction markets are expanding beyond elections, offering insights into hurricanes, geopolitical risks, legislation, and more. These tools could become critical for investors and risk managers, just like futures and options, enabling better hedging against event-driven risks. Learn more in our latest Egan-Jones Risk Commentary: https://lnkd.in/dYc44asn #PredictionMarkets #RiskManagement

When it comes to proxy voting, one size doesn’t fit all. That’s why we’re excited to offer our Wealth-Focused Policy through BlackRock and Vanguard. As The Philadelphia Inquirer reports, our policy is for investors who want to focus on financial performance and governance—not social or environmental concerns. It’s your money, your voice, and now your choice. We’re here to support you with options that align with your priorities. https://lnkd.in/dHG-s9cq #InvestorChoice #ProxyVoting

Consumer confidence is shaping up to be as divided as the political landscape. Republicans are riding a wave of optimism after recent electoral victories, which often leads to increased spending and investment. Democrats, by contrast, report lower confidence, reflecting uncertainty around policy changes that could impact their financial outlook. Why does this matter? Consumer sentiment drives economic activity—when one side of the political spectrum feels less confident, it can dampen overall growth and influence credit markets. For investors and risk managers, these trends are essential to track. As spending patterns shift, so too will corporate earnings and market risks. #MarketTrends #ConsumerSentiment #EconomicForecast Image credit: Reuters

Technological advancements, such as AI, automation, and data analytics, are driving disruption, leaving traditional market leaders struggling to compete with more agile, tech-oriented firms. Shifts in consumer preferences, including growing demands for sustainability, convenience, and digital solutions, are also reshaping industries and threatening the market share of companies slow to adapt. Additionally, macroeconomic pressures like inflation, geopolitical tensions, and regulatory challenges are adding strain, often favoring innovative companies that can respond more flexibly. Learn more about how these factors are already turning many blue chips red: https://lnkd.in/dM_xVZut Image credit: Bloomberg #BlueChips #MarketLeaders #Disruption 

The world is on the brink of a technological revolution akin to the Industrial Revolution, with significant societal, economic, and industrial implications. Advances in artificial intelligence, robotics, energy storage, and computing are creating opportunities for machines to outpace human abilities across many sectors. Machines that outperform humans in games like chess and Go foreshadow the broader adoption of advanced robotics, which can deliver better quality and efficiency at far lower costs than human labor. For example, robots in auto manufacturing can generate savings exceeding $150,000 per workstation annually compared to human workers, highlighting the economic advantage of automation. Dive into this Egan-Jones Risk Commentary for further details on the Productivity Revolution: https://lnkd.in/dH-XT5s9 #DisruptiveTech #Robotics #DigitalTransformation