MNI BRIEF: Fed Rates Need To Stay Restrictive - Daly

MNI BRIEF: Big Disinflation Risk From China -ECB's Cipollone

MNI BRIEF: EU's Dombrovskis- Escape Clause Details In Weeks

MNI China Daily Summary: Tuesday, February 18

MNI BRIEF: NDRC To Support Private Sector

MNI: PBOC Net Drains CNY484.1 Bln via OMO Tuesday

MNI: US NAHB HOUSING MARKET INDEX 42 IN FEB

CANADA JAN CPI +1.9% YOY VS PRIOR +1.8% ON Mortgages and GAS

MNI: CANADA JAN CPI INFLATION +0.1% M/M, +1.9% YY

GERMANY: Economy Ministry Lowers 2025 Growth Forecast As Expected

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

GERMANY: Kukies Considers Potential Non-Implementation Of 2024 Suppl' Budget

© 1982-2025 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

CONSUMER CYCLICALS: VF Corp; widens after post-earnings rally (x3)

CONSUMER CYCLICALS
USBulletCredit BulletsNorth America

(VFC: Ba1/BB)

  • HY reversing most of yesterdays move but VF is struggling to follow - leaves It back at pre-earnings levels vs. IG comps (VFC/PVH 29s +90bps).
  • Some may see yesterdays weakness as a floor for spreads - even if so, it may be less relevant of returns. We were cautious on VF most of last year (tightened post earnings/asset sales -> caution -> rating action -> selling/widening) but investors on the €29/32s still made top 10 total returns - power of carry. Yes ratings are lower now, but they will always lag fundamentals.
  • The harsh decompression behind PVH-27s in 2H22 below is unclear to us (earnings were not down significantly and equities were not underperforming VF).
image
114 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

(VFC: Ba1/BB)

  • HY reversing most of yesterdays move but VF is struggling to follow - leaves It back at pre-earnings levels vs. IG comps (VFC/PVH 29s +90bps).
  • Some may see yesterdays weakness as a floor for spreads - even if so, it may be less relevant of returns. We were cautious on VF most of last year (tightened post earnings/asset sales -> caution -> rating action -> selling/widening) but investors on the €29/32s still made top 10 total returns - power of carry. Yes ratings are lower now, but they will always lag fundamentals.
  • The harsh decompression behind PVH-27s in 2H22 below is unclear to us (earnings were not down significantly and equities were not underperforming VF).
image