Sector data show falling average risk
David Hamilton presents a sector-level breakdown of forward-looking probability of default data comparing Q1 of this year to Q1 of last year. Across most sectors, average credit risk has declined and is expected to continue falling. Medical and pharmaceutical sectors saw the largest improvements, while consumer-sensitive sectors like travel, entertainment, and durables lag. Even within sectors affected by the SaaS disruption narrative, average risk has declined, though divergence within sectors remains significant.