The Credit Edge by Bloomberg Intelligence JPMorgan Sees Credit Risks Rising as Trade War Bites
Mar 27, 2025
Lisa Coleman, head of global investment-grade corporate credit at JPMorgan Asset Management, shares her insights on rising credit risks amid escalating trade wars. Managing $73 billion in assets, she highlights the deteriorating technicals in credit markets and emphasizes the need for higher returns due to uncertainty. Interesting discussions include the shifting landscape for U.S. companies, investment opportunities in healthcare and consumer sectors, and the evolving sentiment around different asset classes as recession fears loom.
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Hidden Risks in Credit Markets
- Current market conditions indicate low recession risk, but underlying risks are present.
- The stability of companies is supported by EBITDA growth, but this growth is slowing.
Technical Market Deterioration
- The technicals of the credit market show some deterioration, especially regarding flows from Japan.
- European flows are still positive, offering potential support.
Investment Opportunities
- Consider upgrading portfolios by leaning into single-A-rated companies.
- Bank debt presents a good investment opportunity due to strong earnings and capital.