Consumer balance sheets and rising delinquency rates/Company earnings comments/Other

While there is a lot of Fed speak today, I don't expect to hear anything different than what Powell just told us both at his presser and on 60 Minutes. 

In the Fed's Quarterly Report on Household Debt and Credit they said this, "Credit card and auto loan transitions into delinquency are still rising above pre-pandemic levels. This signals increased financial stress, especially among younger and lower-income households."

Here are the delinquency details:

In Q4, 2023, 3.1% of outstanding debt are in "some stage of delinquency at the end of December." This compares with 3% in Q3 and 4.7% in Q4 2019. The reason why it is still well below the 2019 figure is because of all the student loan relief that's been given since and all types of loans except student loans saw a rise in delinquency rates in Q4 2023. About 8.5% of credit balances were delinquent vs 8% in Q3 and vs 7% in Q4 2019. With respect to auto loans, 7.7% are delinquent vs 7.4% in Q3 and vs 7% at the end of 2019. 

Mortgage delinquencies remain low because most people have low rate mortgages. 

When you hear the general statement, 'the consumer is strong', it's important to bifurcate the type of consumer one is talking about as some are and more aren't. 

We know consumers are prioritizing spend on leisure and travel, along with mostly needs rather than wants on the goods side. Hertz said this in their earnings call: