U.S. bankruptcies on pace to hit 10-year high: RPT

U.S. bankruptcies are on track to hit their worst levels in a decade, according to S&P Global Market Intelligence. Yahoo Finance's Brian Cheung joins Zack Guzman to discuss.

Video Transcript

ZACK GUZMAN: Some bleak bankruptcy statistics to get to to wrap up our hour, as US bankruptcies look to be on track for 10-year highs. And here to chat that is Yahoo Finance's Brian Cheung, who has more details. Brian?

BRIAN CHEUNG: Well, Zack, the statistic's coming from S&P Global Market Intelligence. And their account for 2020 is 442-- that's 442 companies that have filed for bankruptcy this year. That's as of August 9. For comparison, at the same time last year in 2019, there were only 347 companies that had filed for bankruptcy. Obviously, a lot of those companies that have been affected by COVID-19, getting the nail in the coffin this year have been in retail, when you think of the big names like Neiman Marcus and J.Crew.

But S&P Global Market Intelligence also flagging in a separate note that restaurants could be next. They have another note out today saying that a number of entertainment and restaurant companies could be in danger of defaulting soon, based on their credit ratings and based on where they stand in a debt situation, those being Dave and Busters, Outback Steakhouse, which their parent company is Bloomin' Brands, in addition to Denny's Corporation, saying that those are the largest publicly-traded companies that could be at risk.

For what it's work, they also had the companies that are least at risk of defaulting, that being the big names Chipotle, McDonald's-- and this might surprise you, Zack-- also Wingstop. So apparently wings are doing pretty well during this COVID-19 crisis.

ZACK GUZMAN: Consider me surprised, Brian Cheung, not often. But yes, very bleak picture on the banking front, though, overall. And a lot of that doesn't even tie in some small businesses. As we've discussed on this show, sometimes they just close the doors, don't actually file for bankruptcy court-- or in bankruptcy court, rather, because they don't need to if they don't have any debt. And it's just one of those small-time operations.

But Brian Cheung bringing us the latest look there from the struggles in US companies, as we're seeing it play out here.