What if European auto OEMs and suppliers face a fallen-angel downgrade wave?
European auto OEMs and suppliers face a downgrade wave into fallen-angel territory as EV competition, China weakness, and tariffs erode margins, flooding euro HY with new supply.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. European auto OEMs and suppliers face a downgrade wave into fallen-angel territory as EV competition, China weakness, and tariffs erode margins, flooding euro HY with new supply. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Industrial demand ▼ · Recession signal ▲ · Trade tension ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -1.3% hist -0.81–-0.12% · other way +0.29% (n=11) |
| 2 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.9% hist -0.75–+1.11% · other way +2.85% (n=11) |
| 3 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.9% hist -3.95–+1.08% · other way +27.34% (n=11) |
| 4 | Tech sector XLK 📈 chart | Equity | ▼ -0.8% hist -0.66–+0.23% · other way +0.38% (n=11) |
| 5 | High-yield credit HYG 📈 chart | Rate | ▼ -0.8% hist -0.49–-0.22% · other way -0.33% (n=11) |
| 6 | Nvidia NVDAon Hyperliquid 📈 chart | Equity | ▼ -0.8% hist -1.52–+2.74% · other way +2.29% (n=11) |
| 7 | Financials XLF 📈 chart | Equity | ▼ -0.7% hist -1.12–+0.05% · other way -0.05% (n=11) |
| 8 | TSMC TSMon Hyperliquid 📈 chart | Equity | ▼ -0.7% hist -0.49–-0.02% · other way +2.38% (n=11) |
| 9 | Freeport (copper) FCX 📈 chart | Equity | ▼ -0.6% hist -1.51–+0.23% · other way +0.06% (n=11) |
| 10 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.6% hist -2.13–+5.4% · other way -6.09% (n=11) |
| 11 | Alibaba BABAon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -0.83–+0.52% · other way -4.57% (n=9) |
| 12 | AMD AMDon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -1.36–+1.88% · other way -0.35% (n=11) |
| 13 | Broadcom AVGOon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -1.29–+2.87% · other way +3.79% (n=11) |
| 14 | Micron MUon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -1.58–+2.82% · other way +2.73% (n=11) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| XCU XCU | SHORT | -2.8% · 5d -0.9% | 69% | 38 | 0.34 | ✓ matches cascade |
| JPM JPM | SHORT | -0.8% · 5d -1.3% | 64% | 40 | 0.25 | ✓ matches cascade |
| XLF XLF | SHORT | -0.7% · 5d -0.8% | 62% | 38 | 0.23 | ✓ matches cascade |
| ETH ETH | SHORT | -3.0% · 5d -3.2% | 64% | 12 | 0.22 | ✓ matches cascade |
| SMH SMH | LONG | +1.4% · 5d -0.8% ↺ fades | 62% | 38 | 0.20 | ⚠ differs |
| FCX FCX | SHORT | -1.1% · 5d -0.1% | 61% | 38 | 0.20 | ✓ matches cascade |
| AVGO AVGO | LONG | +2.9% · 5d -1.1% ↺ fades | 60% | 28 | 0.18 | ⚠ differs |
| Gold XAU | LONG | +0.5% · 5d +0.3% | 58% | 38 | 0.16 | · |
| SOL SOL | SHORT | -2.8% · 5d -7.0% | 61% | 11 | 0.15 | ✓ matches cascade |
| INTC INTC | SHORT | -1.2% · 5d -1.4% | 58% | 40 | 0.14 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -1.9% · 5d -1.2% | 57% | 17 | 0.12 | ✓ matches cascade |
| MSTR MSTR | SHORT | -3.3% · 5d -3.0% | 57% | 38 | 0.11 | ✓ matches cascade |
| NVDA NVDA | LONG | +3.0% · 5d -2.7% ↺ fades | 57% | 38 | 0.11 | ⚠ differs |
| 10y yield DGS10 | SHORT | -6bp · 5d +2bp ↺ fades | 57% | 40 | 0.11 | · |