Video: Financially Stretched Consumers Set to Cut Back Spending
December 5, 2023 |
- We are avoiding retail stocks like Amazon (AMZN), Target (TGT), Lowe’s (LOW) and Wayfair (W).
- Also avoiding consumer discretionary stocks like Tesla (TSLA), Carvana (CVNA) and consumer finance stocks like Capital One (COF), Discover (DFS) and Affirm (AFRM).
- Over 51% of Americans now carry a balance on their credit cards each month, a 27% increase since 2018.
- As of October, 28.9% of banks reported tightening standards for consumer lending, a leading indicator of potential recession.
- Delinquency rates across all non-mortgages have surpassed pre-pandemic levels, with a sharp increase observed in the September quarter, particularly among younger consumers.
- Student loan pause added $260 billion in consumption, accounting for up to 0.8% of monthly consumer spending. The pause ended on September 1.
- The average interest rate on credit cards has soared to 20.72%, with rejections for scores under 700 hitting over 50%.