Supply chain Covid nightmares reemerge/Bank stuff/Burberry misses/China

Just as supply chain challenges and nightmares for many during Covid were being fully resolved the rash is acting up again with the Houthi's screwing with the delivery of goods. Just a thought here on how companies might respond and just maybe this actually lifts global manufacturing out of its doldrums. I say this because after a notable decline in inventories since last summer (the just seen wholesale inventory to sales ratio is just off the lowest since July 2022, could it be possible that the de-stock to re-stock transition that hasn't happened yet maybe begins again as companies don't want to get flat footed again with missing supplies. Not that this would speed up the delivery from ships being diverted from the Red Sea but if one is going to order 10 items for example normally, maybe they order 15 just in case. Just something to watch and if the case, along with rising transportation costs, this lifts goods prices after the big fall off its peak highs.

As we absorb the earnings from the big banks today, the Philly Fed released its Q3 credit card data and while it is dated, it is still worth pointing out. They said "Large bank credit card nominal balances continued to grow in the third quarter of 2023 after surpassing pre-pandemic levels in 2022." This is what stands out the most, "All stages of delinquency rates now exceed pre-pandemic levels for the first time and are approaching the series highs since 2012. In response to this deterioration, banks are granting fewer credit line increases and reducing credit lines more frequently in the recent four quarters." https://www.philadelphiafed.org/surveys-and-data/large-bank-credit-card-and-mortgage-data

On to the banks, BoA said its net interest income fell 5% "as higher deposit costs and lower deposit balances more than offset higher asset yields." Their provision for credit loses rose a touch, by $12mm to $1.1b. Net charge offs rose y/o/y. Average deposits rose 2% q/o/q but were down y/o/y. And, "average loans and leases of $1.1 trillion were modestly higher vs Q3 '23."

Jamie Dimon said this in the JPM press release: