Moody's Corporation · NYSE:MCO

Moody's — Moody's Analytics — Investor Presentation (March 2020)

23 slides from Moody's's investor presentation, Mar 20, 2020

  1. Slide 1: COVID-19: Global Recession

    COVID-19: Global Recession March 20, 2020 March 2020 1

  2. Slide 2: Economic Tsunami

    1 Economic Tsunami

  3. Slide 3: Layoffs Surge

    Layoffs Surge Initial claims for unemployment insurance benefits, ths 280 UI claims consistent with 260 no monthly job growth 240 220 200 18 19 20 Sources: BLS, Moody’s Analytics March 2020 3

  4. Slide 4: Nest Eggs Evaporate

    Nest Eggs Evaporate Wilshire 5000 36 34 32 30 Value of publicly trade stocks, tril$ 28 26 24 22 Jan Feb Mar Sources: Wilshire 5000, Federal Reserve, Moody’s Analytics March 2020 4

  5. Slide 5: Businesses Batten Down the Hatches

    Businesses Batten Down the Hatches Business sentiment diffusion index, net % of positive responses 50 40 30 20 Trade war 10 0 COVID-19 -10 Financial -20 crisis -30 -40 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Source: Moody’s Analytics March 2020 5

  6. Slide 6: Global Recession…

    Global Recession… Business cycle status, March 2020 Growth below potential In recession Source: Moody’s Analytics March 2020 6

  7. Slide 7: …That Is Intensifying

    …That Is Intensifying Real GDP growth, annualized % chg. 2020Q1 2020Q2 2020Q3 2020Q4 2019 2020 January base 2.7 2.9 2.7 2.6 2.5 2.6 World March base 0.7 1.6 3.5 2.8 2.4 1.9 Critical pandemic -6.5 -0.4 3.7 3.2 2.4 -0.4 January base 1.5 2.2 1.5 1.2 2.3 1.8 United States March base 1.1 -0.4 1.7 2.4 2.3

  8. Slide 8: Key Assumptions

    2 Key Assumptions

  9. Slide 9: U.S. Case Trajectory at a Key Juncture

    U.S. Case Trajectory at a Key Juncture Number of COVID-19 cases, days since 100 confirmed cases 45,000 40,000 Italy 35,000 S Korea 30,000 US 25,000 20,000 15,000 10,000 5,000 0 0 2 4 6 8 10 12 14 16 18 20 22 24 26 Sources: Johns Hopkins CSSE COVID-19 Data Repository, Moody’s Analytics March 2020 9

  10. Slide 10: Credit Markets Threaten to Freeze Up

    Credit Markets Threaten to Freeze Up Commercial paper discount rates, A2/P2 nonfinancial, 30-day, % 4.0 3.5 3.0 2.5 2.0 1.5 1.0 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 Sources: Federal Reserve, Moody’s Analytics March 2020 10

  11. Slide 11: COVID-19 Pandemic Scenarios

    3 COVID-19 Pandemic Scenarios

  12. Slide 12: COVID-19 Critical Pandemic Scenario (March 20, 2020)

    COVID-19 Critical Pandemic Scenario (March 20, 2020) COVID-19 COVID-19 COVID-19 Pandemic Severe Pandemic Critical Pandemic Scenario Scenario Scenario • Released March 10 • Released March 13 • Released March 20 • 1 million global infections • 3-4 million global • Middle of the distribution • New infe

  13. Slide 13: Output Contraction Swift and Severe

    Output Contraction Swift and Severe Real GDP, annualized qtr/qtr growth rate, March 2020 Forecast Vintage 6 4 2 0 -2 March Standard Baseline (3/10) March Standard S3 (3/10) -4 COVID19 Critical Pandemic (3/20) -6 19 20 21 22 23 24 25 Sources: BEA, Moody’s Analytics March 2020 13

  14. Slide 14: Unemployment to Spike with Gradual Recovery

    Unemployment to Spike with Gradual Recovery Unemployment rate, March 2020 Forecast Vintage 8 7 6 5 4 3 March Standard Baseline (3/10) 2 March Standard S3 (3/10) 1 COVID19 Critical Pandemic (3/20) 0 19 20 21 22 23 24 25 Sources: BEA, Moody’s Analytics March 2020 14

  15. Slide 15: Scenario Probability Distribution Has Shifted

    Scenario Probability Distribution Has Shifted Distribution of 2 yr cumulative jobs lost (+) or gained (-) ILLUSTRATIVE 0.08 March Baseline Distribution Original New 0.07 March S1 10% 2% March Baseline (BL) 50% 25% 0.06 Critical Pandemic (CP) 50% Critical Pandemic March S2 75% 65% 0.05 March S3 90% 8

  16. Slide 16: U.S. Regional Impact

    VAN U.S. Regional Impact

  17. Slide 17: Coronavirus Is Now Everywhere

    Coronavirus Is Now Everywhere COVID-19 cases per million residents, as of March 19 >100 >40 to <100 >18 to <40 <18 Sources: CDC, NBC News, Moody’s Analytics March 2020 17

  18. Slide 18: What Makes a Region Vulnerable?

    What Makes a Region Vulnerable? Distance from the mean (z-score) across numerous dimensions » Social/demographic factors » Direct exposure to virus: number of cases, international travel » Demographics: population density, share of seniors, net migration » Global interconnectedness: airline passenge

  19. Slide 19: Large Metros Will Be Hit Hardest

    Large Metros Will Be Hit Hardest Average z-score across rankings, 0 = metro area average >0.35 0 to <0.35 -0.25 to <0 <-0.25 Source: Moody’s Analytics March 2020 19

  20. Slide 20: Key Regional Engines Will Stall

    Key Regional Engines Will Stall Avg Z-score across all rankings San Francisco CA New York City NY Miami FL Las Vegas NV Honolulu HI Orlando FL Oakland CA Philadelphia PA Seattle WA Long Island NY Most vulnerable metro West Palm Beach FL areas among 100 most San Jose CA Anaheim CA populous. Fort Laud

  21. Slide 21: Q&A

    Q&A Email us at help@economy.com March 2020 21

  22. Slide 22: Contact Us: Economics & Business Analytics Offices

    Contact Us: Economics & Business Analytics Offices West Chester, EBA-HQ London Prague Singapore +1.610.235.5299 +44.20.7772.5454 +420.22.422.2929 +65.6511.4400 121 North Walnut Street, Suite 500 One Canada Square AFI Butterfly 6 Shenton Way West Chester PA 19380 Canary Wharf B1 3rd Floor, Pernerova

  23. Slide 23: March 2020

    © 2020 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings ri

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