Americans Pay Down Debt, Equity Outflows Pass $25 Billion, and a Bond Market Check In
September 28, 2020 | FIRESIDE CHARTS
Americans—particularly those with higher credit scores—are paying down credit card debt at a record pace in 2020, but could that spell trouble for consumer spending? Equity funds saw significant (re: $25 billion+) outflows last week in what could indicate weakening confidence in a rebound. Over in the bond market, high-yield funds also saw massive outflows last week, and bond indices have outperformed the S&P 500® Index year-to-date. But with rates at record lows, is the trend likely to continue?
- A double-edged sword…The U.S. consumer is in great shape overall but if ~2/3rds of our economy is dependent on consumer spending…
Source: The Daily Shot, from 9/28/20
2. Has the “buy the dips” crowd finally thrown in the towel?
Source: EPFR, Haver Analytics, Goldman Sachs Global Investment Research, from 9/28/20
3. Most bonds have outperformed stocks this year. But with rates so low, there is not much yield left to allow room for future gains…
Source: The Daily Shot, from 9/28/20
4. Further confirmation that high-yield bonds are a risk asset, behaving more like stocks than their credit-worthy bond counterparts…
Source: The Daily Shot, from 9/28/20
5. Despite all the 2019-2020 activity to curtail China’s trade surplus, has the pandemic allowed China to increase their global share of the economy?
Source: The Daily Shot, from 9/28/20
6. Are inflation expectations showing up in TIPS purchases?
Source: The Daily Shot, from 9/28/20
7. There is a human crisis in India. With ~90,000 new Covid cases every day, their healthcare system is overwhelmed. They are even rationing oxygen…
Source: JHC CCE, from 9/28/20
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.