Many high-spending, low-risk consumers with multiple high-fee credit cards are choosing just one of them, and card issuers seek to become the one card they can’t live without https://t.co/WAh6DaHfkz ...

Group 1 - The stock market does not fully represent the broader economy, as consumer spending is under significant pressure, particularly in the consumer discretionary and staples sectors [1] - Restaurant and retail stocks are experiencing substantial declines, while earnings for home improvement companies like Home Depot have been decreasing in recent years [1] - The Federal Reserve's interest rate cuts may benefit consumer spending, but a quick recovery is not anticipated [2] Group 2 - Rising credit card debt and high mortgage interest rates are straining consumers, with a concerning increase in credit card debt observed in recent years [5][6] - The financial health of U.S. households can be likened to assessing a company's balance sheet, where high debt levels limit spending capacity [6] - The housing market is facing a prolonged period of unaffordability, as indicated by metrics such as the Case-Shiller Housing Index, which shows elevated home prices [7]

Inflation Concerns - Service sector inflation is showing signs of life, with prices paid by service sector companies for inputs increasing, suggesting upside risks to service sector inflation [1] - Services make up 60% of the CPI index, so a higher rise in service sector inflation suggests that overall inflation may be more sticky and elevated [1] - The consensus forecast expects inflation to be 3% for the next 12 months, while the Fed's target is 2%, indicating a potential upside risk to inflation if the economy doesn't slow down [2] - Goods inflation is moving higher partly because of tariffs, and service sector inflation is also showing upward pressure, leading to the conclusion that a pause in rate cuts may be warranted to assess alternative inflation indicators [2] - If inflation stays higher for longer, consumers will face higher prices, impacting real spending, especially for price-sensitive consumers [2] Economic Outlook - The absence of government data on non-farm payrolls and inflation makes it challenging for markets and the Fed to assess the true state of the economy [1] - Economists have been predicting slowdowns that haven't materialized, and the delayed negative effects of the trade war may not arrive, suggesting the economy may not slow down as expected [1] - Alternative data sources to watch in the absence of government data include Redbook same-store retail sales (weekly), OpenTable restaurant data (daily), and Star hotel data (weekly) [1] AI Impact - The AI story now makes up 35% of the S&P 500, with the 10 biggest stocks accounting for almost 40% of the overall S&P, indicating a high concentration [2] - Larger companies are beginning to report a slowdown in their adoption rate of AI, posing a risk to the economic outlook if the AI story starts to fade [3] - There is a very high concentration in the AI story that's driving the stock market forward, which is somewhat disconnected from what's going on in the economic outlook [5]

Market Trends & Adoption - Buy Now Pay Later (BNPL) usage continues to grow across consumer segments and is becoming ubiquitous in online and in-store shopping [1] - The industry observes widespread adoption of alternatives to credit cards, presenting a significant opportunity to disrupt the US credit card industry [3] - In 2024, an estimated 865 million Americans used BNPL, and this number is projected to rise to 915 million in 2025 [4] Impact on Financial Institutions - BNPL plans are changing consumer spending habits by offering short-term installment options as an alternative to credit cards [2] - Big banks and financial institutions have reasons to be cautious of consumers using BNPL plans, especially with the growing number of users [3] - BNPL represents a significant gap in understanding consumer credit quality [4] Challenges & Opportunities - Credit cards have struggled to adapt to consumers' needs [2] - The industry is in a transition period with skepticism and uncertainty surrounding new products like BNPL, as traditional institutions protect their own products [4]

I think we've seen this movie before. The expectation is that this lasts a few days, but who knows. And where I'm really focused right now, given that the fiscal impact is supposed to be minimal, it's really turning my attention to the labor market in particular.So we know that there will be a for a furlough of around 40% of federal workers, around 900,000 and a delay in pay for all federal workers. Now, the Trump administration has said that they're looking to make some of that permanent, and that could pe ...

Well, the ultra wealthy just got ultra wealthier. I'm CNBC's Robert Frank. The top 10% of Americans added over $5 trillion to their wealth in the second quarter.That was driven mainly by the stock market. All wealth groups saw gains in the quarter with the bottom half of Americans adding about $150 billion to their wealth. But the fastest growth is at the very top.The top.1%, those are folks worth $46 million or more. They have seen their wealth nearly double since 2020 to over $23 trillion. Stocks were the ...

The granular data, does it display the same kind of negativity that the bond market took notice of yesterday. >> Yeah, it does. This is our best estimate of what hiring was in September, negative 32,000. That is our best estimate. It is our most robust estimate.It's rigorous. It's tied to the QCW. So, no, you don't need to dismiss the number.Now, if you look at the the series, we don't fully rebenchmark the year until February with the January release, but that September number is the number. So what it tel ...

Economic Growth - The U.S. economy expanded at a 3.8% annualized rate in the second quarter, marking the fastest growth in nearly two years, driven by robust consumer spending and solid business investment [1] - The Organisation for Economic Co-operation and Development (OECD) raised its growth expectations for the U.S. to 1.8% in 2025, up from 1.6% in June, but forecasts for 2026 are projected at 1.5%, indicating a notable drop from 2.8% in 2024 [2] Consumer Spending - Consumer spending, which constitutes over two-thirds of economic activity, rose by 2.5% in the second quarter, revised up from a previous estimate of 1.6% [3] - In the last month, consumer spending increased by 0.6%, following a 0.5% gain in July [3] Household Wealth - Household wealth reached a record $176.3 trillion in the second quarter, although lower-income families face challenges from rising import-driven prices [4] Investment Trends - U.S. equity funds experienced a net inflow of $12.06 billion in the week ending September 24, reversing two weeks of outflows, with large-cap equity funds attracting $16.94 billion, the largest weekly inflow since April 9 [5] - Large-cap ETFs are recommended as a balanced investment strategy to capture growth potential while maintaining a defensive stance amid economic uncertainty [6] ETF Recommendations - Suggested large-cap ETFs include Vanguard S&P 500 ETF (VOO), SPDR S&P 500 ETF Trust (SPY), iShares Core S&P 500 ETF (IVV), and Vanguard Total Stock Market ETF (VTI) [7] - Growth ETFs such as Vanguard Growth ETF (VUG), iShares Russell 1000 Growth ETF (IWF), iShares S&P 500 Growth ETF (IVW), SPDR Portfolio S&P 500 Growth ETF (SPYG), and iShares Core S&P U.S. Growth ETF (IUSG) are also recommended for investors seeking higher growth potential [9]

Bond Market Reaction & Fed Policy - The long end of the curve is considered cheap based on valuation metrics, but the front end could also move if economic data weakens due to a prolonged shutdown [2] - The market is pricing in gradual Fed cuts to neutral, but a worsening economy (unemployment rate above 45%) could lead to more aggressive Fed action [2] - An independent Fed is responding to data and aiming to reduce the level of restrictiveness, making bonds attractive [6] - The Fed is expected to cut rates to 3%, which is close to neutral, even without a significant slowdown [8] Auction & Demand - End-user demand for Treasury auctions remains strong, indicating structural positives in the US economy [5] - Structural positives in the US economy, such as AI capex and strong corporate fundamentals, are driving demand for US bonds [6] - People look at 55%-6% in high-quality bonds and they like it [6] Investment Strategy & Risk Hedge - The 5 to 10-year part of the curve is considered a sweet spot, offering a balance between yield and duration risk [3][14][15] - Bonds are still considered a hedge, especially with the Fed likely to cut rates more aggressively [12][13] - Investors may diversify into other assets like gold and cryptocurrency, but US Treasuries remain a safe haven [9][10][11][12] - High-yield market can offer yields higher than 5%-6% without taking on that much duration risk [15]

Nike shares uh up nicely today about 4%. Profit and revenue beat Wall Street expectations signaling turnaround efforts that the company may be taking hold. Uh sales grew about 1% from the same quarter a year ago.Surprising analysts. Nike expects current quarter revenue revenue though to fall by low singledigit uh percentages in line with where the street was. Anyway, on the topic of tariffs, and that's has a lot to do with this, Nike said it expects a hit of $1.5% billion uh and a gross margin impact of 1.2 ...