Service Disruption - PayPal attributes irregularities experienced by several German banks to a recent service disruption [1]

Business Structure - Visa and Mastercard are the world's two largest payment card network processors [1] - Their business structures have some significant differences [1]

Core Insights - Total Canadian consumer credit balances reached $2.52 trillion in Q2 2025, marking a 4.4% year-over-year increase, but only a 3% real increase when adjusted for inflation [2][3] - Average consumer total balance increased by 7% from Q1 2022 to Q2 2025, while non-mortgage debt declined by 10%, indicating rising mortgage costs are consuming more household budgets [3][4] - Regional disparities exist in non-mortgage debt levels, with P.E.I. and B.C. reporting the highest average debt levels, while Quebec and Manitoba have the lowest [4][5] Consumer Debt Trends - The average new mortgage loan amount rose 6.9% year-over-year to $368,432, highlighting ongoing affordability challenges for homebuyers [10][11] - More than two million Canadian mortgages are set to renew between 2025 and 2026, with many originally secured at ultra-low interest rates, leading to potential increases in monthly payments [13] - The overall consumer-level serious delinquency rate increased slightly to 1.77%, with Alberta having the highest rate at 2.29% [14][16][17] Economic Conditions and Market Dynamics - Mortgage originations surged 51% year-over-year in Q1 2025, reaching $82.6 billion, driven by lower interest rates and renewed buyer demand [8][9] - The Consumer Credit Industry Index declined by 1.4 points from the previous quarter to 98.8, reflecting softening consumer spending amid rising cost-of-living pressures [19] - Inflation has been a key driver of growth in consumer balances, with average non-mortgage balances rising 10% since 2022 [6]

Group 1: Honeywell International - Honeywell is undergoing a breakup that is expected to create value for investors by allowing its constituent parts to trade as stand-alone companies [4][7] - The breakup is driven by the different valuation methods for aerospace and industrial companies, with Honeywell Aerospace being the largest of the three new companies [5] - The remaining company, Honeywell Automation, will focus on building and industrial automation, aligning with industry trends towards software-driven automation [6] Group 2: American Express - American Express is approaching an all-time high due to its strong performance, catering to affluent customers despite pressures on consumer spending [9] - The company has a diverse revenue stream from card fees and transaction fees, which contributes to its robust business model [10] - American Express reported a 2% net write-off rate in Q2 2025, significantly lower than the industry average of 4.44%, indicating effective risk management [11][12] - Over the past three years, American Express stock has increased by 130.3%, with a current P/E ratio of 21.8, reflecting its strong business fundamentals [14] Group 3: Coca-Cola - Coca-Cola's stock has recently retreated about 6% from its peak of $74.38, but it still offers a forward-yielding dividend of 2.9% [16] - The company has diversified its portfolio through acquisitions, positioning itself well to adapt to changing consumer preferences towards healthier options [17] - Coca-Cola is recognized as a Dividend King, having increased its dividend for 63 consecutive years, showcasing its commitment to returning capital to shareholders [18] - Current valuation suggests a discount compared to its five-year average cash flow multiple, making it an attractive investment option [19]

Stablecoin Adoption - Visa and Mastercard indicate stablecoin usage is negligible and poses no immediate threat to their market dominance [1] - The current scale of stablecoin usage is significantly lower than Visa's $15 trillion annual transaction volume [1] Market Suitability - Visa and Mastercard suggest stablecoins are better suited for countries with unstable fiat currencies [1]

Core Insights - Auto loan refinancing presents significant savings potential for consumers and opportunities for lenders amid persistent inflation and elevated interest rates [1][4] - Approximately 18 million out of nearly 80 million open auto loans in the U.S. are considered "in-the-money" for refinancing, indicating strong candidates for financial benefits [2][4] - Average monthly savings from auto loan refinancing have decreased from $107 in 2021 to $90 in 2024, yet remain substantial for many consumers [3] Consumer Behavior - More than half of consumers surveyed would consider refinancing if they could save between $50 and $149 per month, highlighting a strong motivation for cost-saving measures [3] - The number of consumers eligible for refinancing could increase significantly if the Federal Reserve lowers interest rates, with a potential rise to nearly 20 million with a 25-basis point cut [4] Loan Performance - Consumers who refinanced their auto loans showed a lower likelihood of being 60 or more days past due by 170 basis points compared to those with original purchase loans, with a 320 basis point improvement noted among near prime borrowers [6] - Auto refinance loans are outperforming original purchase loans across all credit tiers, indicating a consistent trend of stronger repayment behavior [5][6] Market Opportunities - Lenders are encouraged to target qualified borrowers for refinancing opportunities, as those who refinance tend to be more financially savvy and proactive in managing their credit [7] - Utilizing tools like TransUnion TruVision LTV prescreens can help lenders identify consumers in specific equity positions for refinancing offers, enhancing marketing strategies [7]

American Express on Friday reported better second-quarter revenue and profits than analysts had expected. https://t.co/8eXSHeQS5W ...

We are getting a market flash on American Express. For that, we'll turn to Hugh Son. Just talked to the CFO.Morning, Hugh. >> That's right, Carl. So, AMX CEO Christoff Layak telling me that their customers have been quote amazingly resilient in the second quarter.Now, as a reminder, the company topped estimates for profit and revenue on a 20% jump in card fees. So, it's been no secret that affluent Americans haven't slowed down their spending, and that remains the case. There are, however, interesting trend ...

Market Overview - Pre-market futures show positive movement with the Dow up +0.12%, S&P 500 +0.09%, Nasdaq +0.16%, and Russell 2000 leading at +0.52% [1] Bond Market - Bond yields remain stable with the 10-year yield at +4.44%, a slight increase of 3 basis points from last Friday, while the 2-year yield is at +3.88% and the 30-year yield at +5.00% [2] Housing Market - Housing Starts for June are reported at 1.32 million, slightly above projections, but still historically low compared to multi-year highs of 500K more in April 2022 [3] - Building Permits increased to 1.397 million from 1.394 million in May, but remain low compared to nearly 2 million in January 2022, prior to interest rate hikes [4] Company Earnings - 3M reported Q2 earnings of $2.16 per share, exceeding expectations of $2.01, with revenues of $6.2 billion, raising full-year 2025 earnings guidance to $7.75-8.00 per share [5] - American Express surpassed Q2 expectations with earnings of $4.08 per share and revenues of $17.9 billion, reflecting a year-over-year growth of +9% [6] - Charles Schwab's Q2 report showed earnings of $1.14 per share and revenues of $5.85 billion, both exceeding consensus estimates, with shares up +5% in pre-market trading [7] Economic Indicators - A preliminary print on Consumer Sentiment for July is expected to improve to 61.8 from 60.7, aligning with a healthier economic outlook as fears of tariffs impacting the economy have lessened [8]

Business Performance - American Express' billed business on its cards and other products exceeded expectations in the second quarter [1]