Here’s why default rates are subdued even as corporate debt levels hit records YASIN AKGUL/AFP/Getty Images Will growing debt levels pull the junk bond market down to reality? U.S. corporate debt levels stand above crisis highs even as default rates among the most leveraged firms remain subdued.
With an economy hitting its stride, it’s perhaps no surprise that the high-yield bond market is placid. The extent of the divergence between debt levels and defaults, however, is worrying to some analysts who feel rising corporate indebtedness will eventually catch out unwary investors and deflate the junk-bond market.
But beyond complacency John Lonski, chief economist at Moody’s Capital Market Research, argued that globalization and the tendency of U.S. businesses to hoard cash as reasons why corporate debt levels may no longer move in sync with default rates and credit spreads.
The high-yield default rate in the fourth-quarter of 2017 fell to 3.3%, even as U.S. nonfinancial-corporate deb..Read More →

Tesla could be falling short of key Model 3 goal, but who’s counting, analyst says Tesla Inc. may be falling short of its production goals for the Model 3, but investors may not necessarily care, analysts at Consumer Edge said in a note Friday.
Tesla TSLA, -1.31% likely will be making 2,000 Model 3 sedans a week by the end of this month, below its target of churning out 2,500 of the key mass-market vehicles, said the analysts, led by James Albertine.
Consumer Edge recently hosted meetings with Tesla executives, and the potential Model 3 production miss was one of its “key takeaways” after the discussions, the analysts said.
Related: Ford finally gets ‘buy’ rating from Morgan Stanley, after 4 years of bearishness
Consumer Edge kept its buy rating on Tesla unchanged, with a price target of $385, which would represent 20% upside from Friday close. Even before the meetings, the analysts were not counting on 2,500 Model 3s a week by the end of first quarter, they said.
The production..Read More →

The president of the Academy overseeing Oscars is under investigation for sexual harassment The president of the Academy of Motion Picture Arts and Sciences (Ampas), John Bailey, is facing accusations of sexual misconduct and an investigation.
Bailey, 75, a veteran cinematographer, has been the subject of three sexual-harassment claims made against him that were submitted to the Academy, which then initiated a review. The news was first reported in the trade publication Variety.
Bailey was elected president in August, replacing Cheryl Boone Isaacs. He worked as director of photography on films such as “As Good As It Gets,” “Ordinary People” and “American Gigolo.”
Ampas, responding to the recent debate on sexual misconduct in Hollywood, has recently taken a hard line on the issue, expelling disgraced film mogul Harvey Weinstein from the Academy.
More from MarketWatch More Coverage Delta flight scare is a reminder never to put electronics in checked baggage Damn the torpedoes — what ..Read More →

Zscaler shares more than double after IPO as CEO touts cloud-based security Zscaler Inc. shares more than doubled on their first day of trading Friday after the cloud-based security company priced its initial public offering above its already-increased range late Thursday.
That rush into the stock is a testament to Zscaler ZS, +106.25% filling a wide need for today’s businesses, which can no longer rely upon solely upon traditional network security as more and more enterprise applications move to the cloud, Zscaler chief executive and founder Jay Chaudhry told MarketWatch.
Zscaler shares surged 106% to close at $33 on volume of 16.8 million shares Friday. The company sold 12 million shares with Morgan Stanley and Goldman Sachs acting as lead underwriters in the first Silicon Valley tech unicorn to go public in 2018. With 117.3 million shares outstanding, Friday’s stock surge values Zscaler at a market cap of $3.87 billion.
Chaudhry said the “moat” system of securing corporate netw..Read More →

Trump Today: President, Moon discuss plans to meet North Korea’s Kim This column provides a daily update on key presidential actions as well as comments, whether spoken aloud or on Twitter, by President Trump. Like the stock market, the deadline for Trump Today action is 4 p.m. Eastern time, even as we acknowledge that substantive news can and does occur after hours.
President Donald Trump on Friday spoke to South Korea’s president about meeting the North Korean leader, as he also urged businessman Danny Tarkanian to drop out of the Nevada Senate race and run for the House instead.
Trump spoke to South Korean President Moon Jae In and reiterated his intention to meet with North Korea’s Kim Jong Un by the end of May. “The two leaders agreed that concrete actions, not words, will be the key to achieving permanent denuclearization of the Korean Peninsula,” the White House said in a statement.
Opinion: Here’s how Trump’s summit with North Korea could suc..Read More →