An effective COVID vaccine may be in sight, and some sectors could see major improvements in their credit fundamentals. The first COVID lockdown brought hotels, airlines and oil companies to their knees, and second wave circuit breakers are causing major financial damage to pubs, restaurants, sports venues and all aspects of the arts. Equity markets have been euphoric about a brighter outlook for some of these hard hit areas of the economy, and some sectors could see a rapid recovery. But the damage wrought by COVID has also disrupted supply chains and some of these will take a long time to recover. The primary and secondary sectors are lower profile but key to the healthy recovery of the overall economy. Have some of them held up well? Were some of them heading for serious trouble?
Figure 1 shows consensus credit trends for a broad range of global sectors [please continue below to access full report].