Highest level since 2020 and second-highest since 2010, S&P Global Market Intelligence reports

  • U.S. bankruptcy filings increased in August after a slowdown in July
  • Total filings for the first eight months of the year are highest since 2020 and second-highest since 2010
  • There were 452 filings in the year through end August, compared to 466 in 2020 and 604 in 2010
  • August saw 63 filings, up from a revised 49 in July
  • High interest rates and geopolitical uncertainty are contributing factors
  • Real GDP increased at an annual rate of 3% in the second quarter compared to the first
  • SunPower Corp., Avon International Operations Inc., and SQRL Service Stations LLC filed for bankruptcy in August
  • Consumer discretionary, industrial, and healthcare sectors accounted for most filings
  • Retailers and fast-food restaurants have been hit hard by inflation and recession fears
  • Big Lots became the latest company to file for Chapter 11 bankruptcy protection

U.S. bankruptcy filings surged in August after a slowdown in July, reaching the highest level since 2020 and the second-highest since 2010, according to S&P Global Market Intelligence. The total for the first eight months of the year reached 452, compared to 466 in the same period in 2020 and 604 in 2010. August saw a 63-filing increase from a revised 49 in July, making it the third-highest monthly total this year. High interest rates and geopolitical uncertainty are contributing factors to the struggle faced by U.S. companies. Despite these challenges, the economy has shown resilience with a 3% annual real GDP increase in Q2, as per the Bureau of Economic Analysis’s latest estimate on August 29. Solar technology provider SunPower Corp., perfumes and cosmetics wholesaler Avon International Operations Inc., and gas station operator SQRL Service Stations LLC filed for bankruptcy in August. Consumer discretionary, industrial, and healthcare sectors accounted for most of the filings, followed by consumer staples, IT, and financials. Discount retailer Big Lots recently filed for Chapter 11 bankruptcy protection.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about U.S. bankruptcy filings, including specific examples of companies filing for bankruptcy and the reasons behind it. It also includes relevant data and statistics to support its claims. The only minor issue is the use of ‘2024’ instead of ‘2022 in the sentence ‘There have been 69 bankruptcy filings in the consumer discretionary space in 2024 so far.’ However, this does not significantly impact the overall factuality level.
Noise Level: 6
Noise Justification: The article provides relevant information about the increase in U.S. bankruptcy filings and highlights some of the sectors affected, but it could benefit from more analysis or context on why this is happening and what it means for the economy as a whole.
Public Companies: SunPower Corp. (SPWRQ), Complete Solaria Inc. (CSLR), Big Lots (BIG)
Private Companies: Avon International Operations Inc.,SQRL Service Stations LLC,Nexus Capital Management LP
Key People:

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Financial Relevance: Yes
Financial Markets Impacted: Bankruptcy filings impact companies’ stock prices and investor sentiment, affecting individual stocks and the overall market.
Financial Rating Justification: The article discusses an increase in U.S. bankruptcy filings, which can have significant financial implications for affected companies and their investors, as well as potential impacts on specific sectors like consumer discretionary, industrial, healthcare, consumer staples, IT, and financials.
Presence Of Extreme Event: Yes
Nature Of Extreme Event: Financial Crisis
Impact Rating Of The Extreme Event: Moderate
Extreme Rating Justification: The article mentions a significant increase in bankruptcy filings, which indicates financial struggles for companies and potential economic issues. While not catastrophic, it is still a notable event affecting the economy.
Move Size: No market move size mentioned.
Sector: Consumer Discretionary
Direction: Down
Magnitude: Large
Affected Instruments: Stocks

Reported publicly: www.marketwatch.com