The Market Bull – November 13, 2019
The major averages finished mixed. The latest rumored trade deal fails again, but the markets don’t seem to care. Powell says negative rates are inappropriate.
The New York Fed 3rd quarter report on Household Debt and Credit is out. Household wealth hit a new record of 107 trillion. Debt increased for a 21st consecutive quarter gaining .7% to 13.95 trillion, a figure 1.3 trillion above the previous peak set eleven years ago. Growth in auto loans and mortgages was particularly strong, credit card and student loan debt also advanced. The devil, as they say is in the details. Much like the income data that over all shows decent growth. When looked at closely the gains are primarily accruing to the top 10% and really the just the top 1%. Same is true for wealth distribution. Of the 107 trillion total the bottom 50% hold a miniscule 1.9% or just over 2 trillion, a figure that has fallen by half since 1999. Looked at from the debt perspective and this cohort holds 36% of the total debt. Other highlights from the report covering the last 10-years. The wealth of the top 1% has surged 18 trillion to 34 trillion. The next 9% saw wealth grow by 16 trillion to 39 trillion. The upper middle class or the 50-90% cohort saw wealth advance 13 trillion to 31 trillion
Delinquency rates increased but remain very low at 4.8% of outstanding debt or 667 billion. Of that 424 billion is seriously delinquent or more than 90 days late.
Every week I read report after report saying how great things are, new record high this, and that. 50+ year low unemployment rate and on and on. On an aggregate basis it would seem to be true. But every close look at the data shows the same thing. The benefits that are accruing are largely going to the top 1%, everyone else is getting screwed and the further down the socio-economic ladder you go, the worse it gets. Never in my 54 years of life have I seen epidemic homelessness like I do today. The deaths of “despair” suicides, drug addiction, opioid crisis etc., data is also off the charts setting many new record highs in the process.
Standard and Poors 500 Index closed at: 3,094.04 up 2.20
NASDAQ finished the day: 8,482.10 down 3.99
Gold ended trading at: $1,464.70 up $11.00