Stocks rallied last week, with the S&P 500 climbing 1.3% to close at 4,415.24. The index is now up 15% year to date, up 23.4% from its October 12, 2022 closing low of 3,577.03, and down 7.9% from its January 3, 2022 record closing high of 4,796.56.
While the overall data indicate continued economic growth, there are signs of stress developing that bear watching.
According to the New York Fed’s Q3 Household Debt and Credit (HHDC) report, the share of debt newly transitioning into delinquency continues to rise for mortgages, auto loans, and credit cards.
In other words, while the “flow” into new delinquency has been picking up, the “stock” of delinquencies remains below prepandemic levels.
“As of September, 3.0% of outstanding debt was in some stage of delinquency, up by 0.4 percentage points from the second quarter yet 1.7 percentage points lower than the fourth quarter of 2019,” New York Fed researchers wrote.
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