Buy now, pay later sounds good until “later” comes around. With credit card debt at a record high and delinquency rates doubling over the past 2 years, CNBC’s story highlights how people who use BNPL are >2x as likely to be delinquent on another credit product (e.g., mortgage, car loan). Folks used it 14% more this year, up >40% on cyber Monday alone. Maybe auditors should require a discount on these revenues.
Per the FT, companies are reluctant to roll back price hikes they took in the post-pandemic supply squeeze. This could keep US inflation high and retail goods less affordable (and BNPL popular, until it can’t be).
The Bank of Canada is expected to keep rates steady, but investors are listening for clues for the future. Per the FT, on a similar path, the ECB is expected to keep EZ rates flat this week, yet investors also are wanting hints for when the pivot will happen in 2024. Folks are asking the BoE to drop language on hikes, per the Bloomberg, as other countries/regions are talking pauses and cuts—and they have experienced disappointing retail sales and weakened output/wages/job creation. But there was an uptick in inflation, making the BoE’s path a bit complicated, per the FT. The PBOC left China’s benchmark lending rates unchanged, per Reuters.
Did he see what happened to the UK? A German far-right leader is talking up Brexit as a model for Germany, per the FT.
According to FactSet’s latest Earnings Insight, only 62% of companies reporting earnings this season have beaten consensus EPS expectations, below the 77% 5-year ave. This week we’ll see reports from Intel, PayPal, and Micron Tech. There’s been more shorts lately—The Market Ear says that short selling > long buying by a margin of 2:1 on a weekly basis and 3:1 for YTD. Profit has not been spread across all sectors.
While we don’t do politics on Arrows, we do focus on market reactions. Traders are starting to forecast the “what if” of a Trump win, now that DeSantis is out. Expectations: the tariff and tax plans would increase bond yields, support the USD, and pressure other countries’ currencies.
HK stocks that are also listed in China are trading at a discount.
Macy’s rejected the $21/share offer from Arkhouse and Brigade.
China doesn’t care about our sanctions. Russia became the greatest source of Chinese oil imports last year, more than even Saudi Arabia. Supplies hit a record 107 mm tons, almost 25% more y/y. That compared with just under 86 mm from Saudi Arabia.