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Consumer Credit Beats Expectations
The Market Bull 2019

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The Market Bull – October 7, 2019

The major averages begin the week with small losses. A trade deal with the Chinese fails once more. Consumer credit beats expectations again.

Consumer Credit beat consensus in August advancing 17.9 billion. Revolving or credit card debt fell again down 1.9 billion. Non-revolving debt, essentially student and auto loans jumped 19.8 billion, the largest gain for this segment in 2019. With debt levels at or near records and banks quick to tighten lending standards at the first sign of trouble. Continued robust credit growth faces some strong headwinds.

Black Knight’s latest Mortgage Monitor for August shows delinquency and foreclosure rates continuing to slip. Just 3.45% of mortgages were delinquent in August while .48% of mortgages were in foreclosure, so total distressed mortgages came to a very low 3.93%. The spike in interest rates at the end of last year crimped the housing market as affordability plunged. The recent sharp yield curve inversion sent rates dramatically lower, sparking another round for the housing boom as affordability improved substantially.

Foreclosure starts hit an 18-year low in August, but defaults have shown signs of upward movement in recent months.

Standard and Poors 500 Index closed at: 2,938.79 down 13.22
NASDAQ finished the day: 7,956.29 down 26.18
Gold ended trading at: $1,497.90 down $15.00


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