HWM - U.S. corporate downgrades drop in Q3 upgrades rise amid strong GDP

A latest S&P Global report indicated that the number of U.S. corporate downgrades fell by 74% in Q3 to 107, its lowest level since 4Q18; upgrade count rose to 43 in-line with 3Q19 level.Amid consumer spending holding up better than expected post the earlier fiscal stimulus, credit conditions turned less negative for companies.Negative bias or speculative-grade companies fell to 47% on Sept. 30, 2020, from 52% at the end of June.S&P Global economists estimate U.S. GDP grew at an annualized rate of 29.5% Q3 reversing from the 31.4% contraction in Q2.The report states that weakness persists at the lowest rating levels as it expects recovery for many sectors to last into 2023: companies rated 'B-' and lower accounted for 53% of downgrades in the quarter, and companies rated 'CCC+' and below have a negative bias of 89%.Sector-wise, the oil and gas sector now has the highest negative bias at 69%

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U.S. corporate downgrades drop in Q3, upgrades rise amid strong GDP