Stock Market’s Weakest Links Dominate With Full-Throttle Fed
- Firms with shaky finances beating out strong balance sheets
- Fed created hospitable environment for credit risk: CIBC
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For proof the Fed’s largesse has been powerful in the stock market, look no further than how firms with the shakiest finances are faring.
Companies with weak balance sheets are beating those with sturdier accounts by over 20 percentage points so far this quarter, the biggest gap since at least 2006, according to data compiled by Goldman Sachs Group Inc. and Bloomberg. The list of firms with rickety credit includes Expedia Group Inc., Alaska Air Group Inc. and Carnival Corp. -- a group that doubles as the hardest hit by the coronavirus pandemic.