JPMorgan: Strong U.S. corporate earnings but continued leverage increase

Glonghui, May 7｜JPMorgan analysts stated that even with strong earnings that could be used to reduce leverage, US companies continue to increase their debt. After studying corporate financial reports, analysts found that companies with the highest levels of debt also show earnings growth significantly faster than the average. They noted that earnings growth alone would be sufficient to reduce corporate leverage, but some companies "choose to continue increasing debt to maintain a strong earnings growth outlook," citing large-scale cloud service providers as an example. JPMorgan pointed out that for investors, this means that although the scale of bond issuance remains large, credit spreads may still remain at a relatively low level because corporate earnings growth continues to keep pace with the expanding debt scale.