Credit Card Charge-Offs Weigh on the Markets
U.S. credit companies reported delinquencies and charge-offs for November. Nice sum-up by Reuters: U.S. credit card charge-offs resume climb. It doesn’t look nice. Looks like American Express (AXP) is most aggressive in addressing the situation and they are apparently managing to show some improvements. Capital One (COF) again with worsened numbers. Nice group of potential short plays, will be watching closely.
Earlier today I commented on Industrial Production and PPI which were modestly positive. The Empire State Manufacturing Survey and NAHB/Wells Fargo Housing Market Index, on other hand, came out to be negative.
The Empire State Manufacturing Survey was the biggest upset. After four months of improvement the general business conditions index fell 21 points, to 2.6. The positive readings point to expansion. Press release.
Chart 1. NSMS General Business Conditions Index
Source: Federal Reserve Bank of New York
The December NAHB/Wells Fargo Housing Market Index fell one point to 16, the lowest point since June. Press release.
Chart 2. Housing Market Index (HMI) and The Three Components 1995 to Present
Source: NAHB/Wells Fargo Housing Market Index
I wrote in earlier posts that low inventory levels could lead to strong GDP growth in following quarters; Housing also contributes significantly to the economic growth and these HMI figures are telling exactly the opposite story.
Empire State Manufacturing Survey, Industrial Production, NAHB/Wells Fargo Housing Market Index, PPI, U.S. Credit Card Charge-offs