In this special report by HedgeWeek, based on research by S&P Capital IQ, credit events are examined to see if they can impact the price of equities.
The report considers:
• Which market leads: fixed income or equity?
• Long-terms rating changes are impactful in three scenarios
• The impact of a 50 basis points CDS spread on performance
The research found that rating analyst downgrades often preceded trouble in the equity price of companies. It focuses on three geographies – US, Europe and Asia – and the results were consistent across all three regions.