'Fast Money' traders talk market impacts of cracks in the consumer

Consumer Credit Concerns - Consumer credit scores are falling at the fastest pace since the global financial crisis, with 90-day plus delinquency rates for credit cards exceeding 12%, the highest in 14 years, and average credit card rates around 21.5% [2][9] - There is a notable increase in loan loss reserves among subprime customers, particularly those with FICO scores under 550, indicating rising financial distress in this demographic [9][10] Market Reactions - Despite concerns regarding consumer credit, the market has not yet reflected these issues significantly, with high-yield bonds (HYG) performing well [3] - Banks experienced pressure, potentially due to rebalancing, but the overall economic outlook remains stable, with expectations that higher-end consumers will continue to perform well [4][12] Sector Performance - The performance of different financial institutions varies, with JP Morgan and Capital One expected to provide insights into consumer behavior due to their distinct customer bases [12][15] - American Express faced unexpected declines despite its higher demographic, while Mastercard and Visa held up relatively well, indicating differing impacts across financial service providers [13][14] Economic Indicators - The Federal Reserve's dual mandate of full employment and stable prices is creating a complex environment, with recent PCE data showing persistent inflationary pressures [7] - Upcoming job numbers are anticipated to shed light on the lower-end consumer's situation, which may influence market sentiment [8]