Eq: Total Market

(New York)

One would think that 2018 is the perfect time to boost lending to consumers. The economy is strong, the job market is robust, and things are generally humming along nicely. Think again, as US banks are worried about US consumer credit quality and are starting to reign in lending. Bad debt is rising and so is the amount of bad credit banks are having to swallow. Beyond just fundamentals, the competition to lend has made the market uber-competitive, which heightens the risks for lenders because of weaker terms.

FINSUM: Consumer credit is tightening its belt across the board as credit balloons and standards fall. We wonder how much this tightening might impact the economy over the next year.

(New York)

Pimco has just gone on the record warning that indicators of a recession are flashing worrying signs. Based on trends in the economy and markets, including inflation, Pimco says it is time for investors to adjust their portfolios. In order to play the looming recession, Pimco suggested five trades. These include: short-term corporate bonds, a basket of EM currencies (Finsum comment: ??), gold, large cap stocks over small, and alternative investments.

FINSUM: Wow, most of these are deeply contrarian (i.e. EM currencies, gold, and large caps). All three of those picks have major headwinds against them. The case against EM currencies is clear but why pick gold when rates are rising, the Dollar is strengthening, and investors have shown zero appetite despite all the volatility?

(New York)

The US real estate market has seen a string of bad news over the last few months, but many were hoping July housing starts would see a rebound. New data out shows that such a boost did not materialize, with housing starts underperforming expectations. The previous month’s reading was also downgraded by 13%. “Housing is the sole weak spot in the economy right now, and that’s probably not going to change”, according to one economist.

FINSUM: There is no near-term recovery in sight. We wonder if housing might be a leading indicator of a looming recession.

Page 83 of 92

Contact Us



Subscribe to our daily newsletter

We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…