JPMorgan Chase & Co (NYSE:JPM) shares are lower Monday afternoon, falling as investors dumped financials amid a broad sell-off tied to mounting worries over private credit and AI-linked credit risks. The broader State Street Financial SPDR ETF (NYSE:XLF) dropped more than 3%, with big banks and asset managers leading declines.Here’s what investors need to know.JPMorgan Chase stock is feeling bearish pressure. What’s pressuring JPM stock?Blue Owl Redemption Shift UnnervesRecent headlines about "halting redem ...

Core Insights - Jim Chanos warned that AI infrastructure is increasingly reliant on leveraged financing tied to depreciating hardware, with Nvidia Corp exemplifying this trend [1] - Nvidia's AI growth narrative is shifting from a semiconductor focus to a credit-centric story [1] Financing Landscape - CoreWeave Inc has built its AI cloud using over $10 billion in private credit, primarily backed by Nvidia GPUs and data center assets [2] - Analysts estimate CoreWeave's GPU-collateralized debt at approximately $10.45 billion, with total debt commitments projected to exceed $12 billion by 2025 [2] - CoreWeave has aggressively layered financing, securing a $2.3 billion GPU-backed facility in 2023, a $7.5 billion private credit facility in 2024, a $2.6 billion term loan in 2025, and $2 billion in convertible notes [3] Broader Market Implications - The "neocloud" sector is estimated to carry over $20 billion in GPU-backed debt, creating a new private-credit asset class focused on AI infrastructure [4] - For Nvidia shareholders, AI demand is increasingly linked to the availability of private credit, not solely enterprise adoption [5] - The capital structure of AI infrastructure is becoming more debt-financed, indicating a shift in how Nvidia's revenue is influenced by capital market conditions [5] Investment Perspective - Nvidia remains a semiconductor story, but it is also evolving into a private credit macro trade, a factor that Wall Street is beginning to incorporate into its pricing [6]

Apollo's boss Marc Rowan says everyone's lost their minds over the dangers of private credit. He's not entirely right, argues @PaulJDavies (via @opinion) https://t.co/tLhJX6lTC9 ...

Federal Reserve (The Fed) & Interest Rates - A potential hawkish rate cut in December is considered, driven by core PCE expectations around 310% and unemployment nearing 450% [2][3] - The impact of a 25 basis points rate cut is questioned regarding its effectiveness on the S&P 500 and overall market stimulus [4] - The market is less convinced about further rate cuts into next year until a more dovish Fed stance is observed [3][4] Private Credit Market - Vintage risk in private credit deals from 2021-2022, impacted by poor valuations and changing rate environments, is a key concern for the coming year [6] - The conversation around private credit involves both potential losses/defaults and liquidity issues, with some investors misunderstanding the liquidity of these structures [7] - Default rates in private credit have remained relatively low, averaging between 200% and 350%, depending on the source [11] - More frequent marks, specifically monthly marks, are becoming more common in the private credit market, revealing divergence among different managers [11] - Aggregate credit quality has held up, but concerns around marks and liquidity are more significant questions [12] Economic Indicators & Consumer Credit - Insurance costs and auto/home-related expenses remain high, warranting attention for potential credit quality deterioration [9] - Defaults are expected at the margins, particularly in sectors tied to the lower-income consumer and certain forms of consumer credit [8]

Summary of Moody's Conference Call Company Overview - **Company**: Moody's Corporation (NYSE: MCO) - **Event**: Info Services Track of the Ultimate Service Investor Conference - **Date**: November 18, 2025 Key Points Industry Insights - **M&A Activity**: There has been a significant increase in M&A activity in the second half of the year, contrary to initial expectations. This includes both strategic and sponsor-backed M&A, which positively impacts issuance volumes [7][10] - **Economic Growth**: Economic growth has slowed but remains better than market expectations, contributing to a favorable environment for debt issuance [7][8] - **Default Rates**: Default rates are slightly above long-term averages but have been decreasing, which is conducive for issuance [8] - **Issuance Trends**: The strongest issuance has been in the corporate segment, particularly in investment-grade and leveraged finance [8] Financial Performance - **Revenue Growth**: Moody's anticipates medium-term organic revenue growth targets of high single digits to low double digits, with a focus on areas with strong growth potential [18][19] - **Refinancing Needs**: A significant amount of debt issued over the past five years will need refinancing, which supports future issuance [11][12] AI and Technology - **AI Opportunities**: The company views AI as a significant opportunity to monetize proprietary data and analytics, enhancing customer engagement and expanding use cases [20][21][26] - **Digital Fulfillment**: Moody's is developing a digital fulfillment model to better serve customers and monetize content across various platforms [30][31] Market Dynamics - **Investor Sentiment**: There is growing interest among investors regarding the credit quality of private credit funds, indicating a shift in focus towards understanding credit risk [48][59] - **Partnership with MSCI**: The collaboration aims to provide Moody's modeled credit ratings to investors in private credit, enhancing their understanding of credit risk [49][50] Challenges and Considerations - **Two-Speed Economy**: The U.S. economy is experiencing a two-speed dynamic, with disparities in growth across different sectors, particularly between the AI-driven economy and traditional sectors [15] - **Structured Finance Outlook**: There has been a modest reduction in the outlook for structured finance and public category issuance, attributed to slower growth in consumer finance [14][15] Strategic Focus - **Investment Areas**: Moody's plans to invest in segments with the strongest growth potential, including banking, lending, and insurance [19][38] - **Proprietary Data Utilization**: The company emphasizes the value of its proprietary data in various applications, including risk assessment and credit modeling [37][40] Conclusion - Moody's is positioned to leverage its proprietary data and analytics capabilities to navigate the evolving market landscape, particularly in the context of increasing M&A activity and the integration of AI technologies. The focus on understanding credit risk in private credit markets presents a significant opportunity for growth and engagement with investors [58][59]

Jeffrey Gundlach says markets are "incredibly speculative" and warns the next crisis will come from "garbage lending" in private credit https://t.co/guPla8uVgF ...

Financial Data and Key Metrics Changes - The company reported a core EPS growth of 16% year-over-year, supported by record core earnings and strong underlying business growth across various segments [10][12][28] - The LICAT ratio remained strong at 138%, providing a buffer above the supervisory target ratio, while the leverage ratio improved to 22.7% [10][27] - Book value per share increased by 7% year-over-year, reflecting continued capital return to shareholders [10][26] Business Line Data and Key Metrics Changes - Insurance new business performance showed growth of 15% or greater in new business CSM across all segments, with APE sales increasing by 8% year-over-year [14][9] - Asia segment core earnings increased by 29% year-over-year, with new business CSM and value metrics rising by 18% and 7% respectively [21][11] - Global WAM reported a 19% growth in pre-tax core earnings, despite net outflows of $6.2 billion due to challenges in the North American retail market [22][15] Market Data and Key Metrics Changes - The company experienced net outflows of $6.2 billion in global WAM, primarily due to pressures in the U.S. retirement channel and intermediary channels [15][22] - APE sales in Canada increased by 9% year-over-year, driven by strong growth in the individual insurance business [24] - The U.S. segment saw a 51% increase in APE sales, although core earnings decreased by 20% year-over-year due to unfavorable life insurance claims experience [25] Company Strategy and Development Direction - The refreshed enterprise strategy focuses on sustainable growth, leveraging strengths in Asia and global WAM, and entering the Indian insurance market through a joint venture with Mahindra [7][6] - The company aims to become an AI-powered organization, enhancing product offerings and customer engagement through digital innovation [8][9] - The strategy emphasizes balanced growth across markets, with continued investments in Canada and the U.S. to sustain scale and capital generation [60][59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2027 financial targets, highlighting strong fundamentals and growth potential in Asia and global WAM [10][28] - The company anticipates challenges in net flows but remains optimistic about future earnings potential driven by strong market fundamentals [22][25] - Management noted the importance of adapting strategies to evolving external environments to ensure long-term success [58][59] Other Important Information - The company completed its annual basis change, resulting in a net favorable impact of a $605 million decrease in overall pre-tax fulfillment cash flows [18][19] - The company expects remittances for 2025 to be approximately $6 billion, contributing to a cumulative target of at least $22 billion by 2027 [27][28] Q&A Session Summary Question: Details on the India venture - Management highlighted the favorable regulatory environment and digital infrastructure in India, with plans to enter the market through a joint venture with Mahindra, expected to take 12-18 months for regulatory approvals [31][32][33] Question: Outlook for Asia markets - Management noted strong sales momentum in Asia, with broad-based success across multiple markets, and expressed optimism for continued growth [38][39] Question: Private credit exposure - The company reported a below-investment-grade private credit portfolio of around CAD 4 billion, emphasizing strong performance and low risk [41][42] Question: Impact of GMWAM fee changes - Management confirmed guidance of about $25 million per quarter in impacts from fee changes, with proactive measures taken to mitigate effects [48][49] Question: Actuarial review and LTC assumptions - Management discussed the favorable impact of the LTC triennial review, reflecting higher medical inflation and utilization trends [50][51][52] Question: Strategy refresh rationale - Management explained the need for a refreshed strategy to adapt to changing external environments while maintaining focus on balanced growth across markets [57][58][60]

Blackstone is leading a £1.5 billion ($2 billion) private credit package for Permira’s buyout of JTC, according to regulatory filings https://t.co/yTqPcztA51 ...

UBS Chair Colm Kelleher is right to warn about a lack of regulation of insurance companies backing private credit, argues @PaulJDavies (via @opinion) https://t.co/FXBDIKOPtV ...

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