More signs of consumer stress

Please, not another debate. 

With the economy and markets, the big news yesterday was what came out of the Barclays conference, particularly from Ally Financial where in case you missed it, said "Over the course of the quarter, our credit challenges have intensified. Our borrower is struggling with high inflation and cost of living and now, more recently, a weakening employment picture...In July and August, we saw delinquencies up about 20 bps vs our expectations." They expect it to keep rising "just given the size of this population of struggling borrowers...And so that's really kind of one of the things that's put us on notice around credit development." Its stock was down 18%, the biggest one day decline in the stock since March 2020. 

This follows what we saw Monday from the NY Fed's Consumer Expectations survey that said "The average perceived probability of missing a minimum debt payment over the next three months increased by .3 percentage point to 13.6%, its 3rd consecutive increase. The current reading is the highest since April 2020."

See below more commentary on the state of the US consumer which I've talked non stop about when poring over so many consumer touching earnings calls. Many are stretched and stressed.

Notwithstanding the drop in mortgage rates and expectations that they will continue to fall, the August Fannie Mae Home Purchase Sentiment index out on Monday rose just .6 pts to 72.1. They said, "Despite significantly greater optimism that mortgage rates and home prices will move in a more favorable direction for potential homebuyers, most consumers remain apprehensive about the housing market and continue to point to the lack of affordability and supply as the chief reasons for their pessimism."