An update on banking/'Value' is the new sexy word as was 'AI'/Other good stuff

The new August Dallas Fed's Banking Conditions Survey continues to reflect a tight credit situation which mostly impacts small and medium sized businesses. "Loan volumes were flat in August after increasing in the prior two periods, and loan demand slipped. While overall credit tightening continued, standards and terms stabilized for residential real estate and consumer loans after more than two years of tightening. Loan prices held steady, marking the first time since 2021 that rates didn’t rise. Loan nonperformance continued to increase. Bankers’ outlooks faltered somewhat: They expect a deterioration in loan demand, loan performance and business activity six months from now."

​​​And comments from bank respondents reflect this anecdotally. There are a few hopes things improve with rate cuts, but despair by others with challenging conditions and apparent economic dispersion's. 

"Rates, inflation and the upcoming election have impacted loan demand. We have expectations that things will pick up after the election."

"Increases in nonperforming commercial real estate loans are isolated to a few credit accounts and are less related to a specific industry."

"The higher-for-longer narrative has dampened demand; the market is anticipating rate cuts, which should stimulate demand."

"Bifurcation is occurring between large public companies and private, middle-market firms. For middle-market firms, average EBITDA and margins have been falling due to higher costs and an inability to further increase prices. With interest rates remaining elevated, higher debt service cost is also taking its toll on net profit after tax. Expect to see an increase in covenant breaches and defaults."

"[We are in a] deep recession. The Federal Reserve has waited too long to reduce rates."

"Uncertainty about future rate cuts is beginning to be unsettling for customers. They will wait for rates to settle before moving forward with business deals."

"Economic signals are still sending mixed messages. Unemployment is still low, but hourly employees are having a more difficult time finding work. Inflation is slowing, but it’s still a factor in how people spend their money. Plus, the presidential election cycle is causing more uncertainty as usual."

"Our general impression is that economic conditions have worsened across the board."

"A lot depends on the election in November 2024."

"We are seeing a significant slowdown in residential real estate applications (both consumer and investor). The uncertainty as to when rates will decline and the upcoming election have caused potential buyers to pause or delay their purchases."

​​​Nothing says success right now in retail like the word 'value' with consumers so focused on seeking it out. Just as saying AI excites the tech investor, it's 'value' for retailers now that is sexy. I bolded for emphasis.