ab 20 November 2025 Global Research Global Strategy 2026 Outlook: AI Debt Boom Meets Credit Risk Global: A US-led Correction, but the Credit Cycle Continues US: A Private Credit and AI Debt Financing Story EU: A J-curve Recovery and Dispersion Story Global Strategy Global Matthew Mish, CFA Strategist matthew.mish@ubs.com +1-203-719 1242 Julien Conzano Strategist julien.conzano@ubs.com +44-20-7567 2067 Bhanu Baweja Strategist bhanu.baweja@ubs.com +44-20-7568 6833 Global: A US-led Correction, but the Credit C ...

Truist analyst Matthew Coad lowered the firm’s price target on Block (XYZ) to $67 from $74 and keeps a Sell rating on the shares as part of a broader research note updating the firm’s models on Payments names after their Q3 results. The firm is cutting its earnings multiple to 21-times to 24-times due to Block taking on more credit risk, the analyst tells investors in a research note. Meet Your ETF AI Analyst Discover how TipRanks' ETF AI Analyst can help you make smarter investment decisions Explore ...

A measure of Eskom’s credit risk has narrowed to the lowest in a year as investors deepen bets that South Africa’s state-owned power utility has turned a corner https://t.co/ISFmk7qPm6 ...

Vietnam’s banks rapid pace of lending is fueling risks, which could increase when the government removes a long-standing credit quota system, Fitch Ratings warns https://t.co/ruohykP9yD ...

>> FROM NEW YORK CITY FOR OUR VIEWERS WORLDWIDE, I AM MATT MILLER. BLOOMBERG REAL YIELD STARTS RIGHT NOW. MATT: COMING UP, U.S. CONSUMER SENTIMENT HIT A THREE-YEAR LOW AS THE GOVERNMENT SHUTDOWN WEIGHS ON SPENDING WHILE THE FED'S DUAL MANDATE REMAINS IN CONTENTION, LEADING TO FURTHER DIVISION ON THE COMMITTEE.AND A GLOBAL BOND SALES HIT A RECORD AS ALPHABET ADDS FUEL TO THE BENCH ON DEBT. WE BEGIN -- BINGE ON DEBT. WE BEGIN WITH A DIVIDED FEDERAL RESERVE.>> WHAT I SEE IS A VERY WEIRD ECONOMIC CYCLE. >> THE ...

Financial Data and Key Metrics Changes - Old National Bancorp reported GAAP earnings per share of $0.46 for Q3 2025, with adjusted earnings per share of $0.59, reflecting an 11% increase from the prior quarter and a 28% increase year over year [7][12] - The company achieved a 20% return on average tangible common equity and a 1.3% return on assets, with an efficiency ratio below 50% [3][5] - The CET1 ratio increased by 28 basis points to over 11%, and tangible book value per share grew by 4% from Q2 and 10% year over year [7][15] Business Line Data and Key Metrics Changes - Total loans grew 3.1% annualized from the previous quarter, with production up 20% from the prior quarter [8][9] - Adjusted non-interest income was $130 million for the quarter, exceeding guidance, driven by strong performance in capital markets [12][18] - Adjusted non-interest expenses were $376 million, reflecting a full quarter impact of Bremer operations, with a low efficiency ratio of 48% [13][19] Market Data and Key Metrics Changes - Total deposits increased by 4.8% annualized, with core deposits (excluding brokered) increasing by 5.8% annualized [10][11] - Non-interest bearing deposits remained at 24% of core deposits, and brokered deposits decreased modestly [10][11] - The company achieved an approximate 85% beta on its exception price book spot rate in conjunction with the Fed rate cut in September [11] Company Strategy and Development Direction - The company is focused on organic growth and returning capital to shareholders, emphasizing that the best acquisition is itself [5][25] - Management is strategically recruiting top-tier talent and investing in future growth opportunities while enhancing efficiency [4][6] - The company aims to leverage its leading market position and capitalize on market disruptions [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the credit outlook, noting a decline in criticized and classified loans and stable credit metrics [15][19] - The company anticipates continued success in executing its deposit strategy and expects to meet or exceed industry growth in 2025 [18][19] - Management highlighted that the systems conversion for the Bremer Bank partnership was successful, with positive client sentiment and operational efficiency [36][38] Other Important Information - The company repurchased 1.1 million shares late in the quarter, reflecting confidence in capital levels and the trajectory of the business [16][102] - The full run-rate cost savings from the Bremer acquisition are expected to materialize in Q1 of the following year [95][96] Q&A Session Summary Question: What drove the reduction in NII expectations for the fourth quarter? - Management indicated that the reduction from $590 million to $585 million is minor relative to the overall balance sheet size and reflects stable dynamics [22][23] Question: What are the preferred uses for capital moving forward? - Management emphasized organic growth as the primary focus, with opportunistic buybacks based on capital generation [24][25] Question: How did the systems conversion go? - Management reported that the systems conversion was the best to date, with high client satisfaction and minimal issues [36][38] Question: What is the outlook for loan growth from Bremer? - Management expects consolidated loan growth to align with overall company growth, with no significant swings anticipated [70][73] Question: How does the company view the credit environment? - Management described the credit outlook as stable to improving, with a focus on active portfolio management [97][99]

Core Insights - McKesson Corporation has a market capitalization of $97.9 billion and is a leader in healthcare services and information technology, operating through four segments: U.S. Pharmaceutical, Prescription Technology Solutions, Medical-Surgical Solutions, and International [1] Financial Performance - McKesson is expected to announce its fiscal Q2 2026 results on November 5, with analysts forecasting an adjusted EPS of $8.92, representing a 26.2% increase from $7.07 in the same quarter last year [2] - For fiscal 2026, analysts predict an adjusted EPS of $38.12, a 15.3% increase from $33.05 in fiscal 2025 [3] Stock Performance - Over the past 52 weeks, McKesson's stock has increased by 54.9%, outperforming the S&P 500 Index's rise of 15.1% and the Health Care Select Sector SPDR Fund's decline of 3.1% [4] Recent Developments - Despite reporting a better-than-expected Q1 2026 adjusted EPS of $8.26 and revenue of $97.83 billion, McKesson's shares fell by 5.8% the following day due to a 10.7% drop in GAAP EPS to $6.25, attributed to a $189 million bad debt provision related to the Rite Aid bankruptcy [5] Analyst Ratings - The consensus rating for McKesson stock is bullish, with a "Strong Buy" rating from 12 out of 17 analysts, while the average price target is $839.27, indicating a potential upside of 6.3% from current levels [6]

Earnings vs Federal Reserve - The market currently perceives earnings reports as more significant than Federal Reserve actions, with expectations of two rate cuts by the end of the year reducing uncertainty [1][2] - High valuation levels create a challenging environment for earnings, with a high bar set for companies to meet or exceed expectations [2][4] Market Catalysts - Upcoming earnings reports, Nvidia's GTC, and tariff headlines are identified as critical catalysts for market movement [2][3] - The market is closely monitoring earnings performance, questioning whether results will need to exceed previous benchmarks to satisfy investor expectations [3][4] Regional Bank Credit Concerns - There is a growing discomfort in the market regarding regional bank credit issues, which have emerged in a concentrated timeframe, leading to speculation about potential systemic risks [5][6][9] - Despite concerns, the issues are viewed as idiosyncratic, with a belief that they may not represent a broader credit event risk but could indicate lighter underwriting standards [8][10] Investment Opportunities - High-quality stocks and AI-powered generation companies are recommended as attractive investment opportunities, particularly in the context of energy and grid issues in the U.S. [10][13] - The construction of data centers is highlighted as a sector where power costs are a smaller part of total expenses, suggesting a willingness among major tech companies to invest heavily in energy solutions [13][14]

Economic Impact of Government Shutdown - The ongoing government shutdown, now in its 20th day, is negatively impacting the economy as federal workers are not working, leading to a ripple effect on local businesses [4][5] - The uncertainty surrounding the resolution of the shutdown complicates long-term investment decisions, as markets are unclear about future tax policies and government actions [5][6] Bond Market Insights - Recent data indicates a flight to safety in the bond market, with yields dipping below 4%, the lowest close in about a year, due to concerns over defaults and bad loans at regional banks [6][8] - High yield credit spreads are expected to widen further as more companies in distress are becoming visible, although investment-grade bonds have remained stable [8][9] Federal Reserve Rate Cuts - The market is pricing in several rate cuts, with expectations of two more cuts this year and another into next year, although this may be overly aggressive depending on upcoming economic data [10][12] - There is a divergence in views within the Federal Reserve, with some members expressing caution regarding inflation pressures, which could affect future rate cut decisions [12]

Global credit markets are on edge as fresh loan blowups fuel credit risk concerns and stir memories of the 2023 US regional banking crisis. US high-yield and leveraged-loan funds each had $1.3 billion of outflows in the latest week, a sign that investors are readjusting their holdings of higher-risk debt. Investors are showing signs of becoming choosier about what they buy amid a flurry of negative headlines that has undermined the resilience of credit markets. CreditSights Global Head of Strategy Winnie C ...