Monday's Scoop: Conflicted🌤️

Hey friend - I hope you had a fantastic weekend. If you have cable, look out for an interview with me in the “Business Minute” on CNBC’s Squawk Box this week (6-9 am EST).

Insiders, catch up with our Weekly Scoop. If you’re not an Insider, refer, open, vote, or upgrade to unlock your status!

Here’s what you need to know today to inform your work, spending, and investments…

1. Rents keep rising.

2. Americans are spending more.

3. More people are falling behind on their credit card payments.

Inflation Rate: +3.5% (YoY), +0.4% (MoM)
^{Policymakers aim for 2% YoY inflation (CPI)}

More people are falling behind on their credit card debt at an alarming rate. According to a report from the Federal Reserve of Philadelphia, US credit card delinquency rates ended in 2023 at the highest level on record going back over a decade. Nearly 3.5% of all credit card balances were at least 30 days overdue. Accounts more than 60 and 90 days past due also climbed. About 10% of credit card borrowers carry a balance of over $5,200. The main problem is the rising cost of living. When adjusting for inflation, credit card balances are still below 2019 levels.

Americans keep spending despite climbing price tags. The Commerce Department reported retail sales soared 0.7% in March after surging 0.9% in February. Rising gas prices have demanded a more significant portion of consumers’ budgets, but that was only one reason spending was up. Higher wages have started to translate into more spending power. So-called core retail sales, which excludes gas, vehicles, building materials, and food services, rose by 1.1%, the most in over a year.

30yr Mortgage Rate: 7.0%
^{That’s up from 6.7% a year ago. (MBA)}
Median Existing Home Price: $384,500
^{That’s up from $364K a year ago. (NAR)}

Rent prices keep climbing. Digital realtor Redfin reported national median rent prices have risen every month this year after declining for most of last year. The median rent is 1% higher than it was last year. That’s a much slower annual increase than the 10-15% rent spikes in 2021 and 2022, but it’s not encouraging to see consistent inflation again. Rents in the Midwest are climbing much faster than other regions due to relatively less residential investment and construction.

The Market: ⬇️ -1.2%
S&P 500: 5,061.82
1Mo: -2% | 1Yr: +22% | 5Yr: +72%

The market slumped on Monday as investors worried about the escalating conflict between Iran and Israel. The strong consumer retail spending report also fueled fears that inflation will remain high and policymakers will refuse to make borrowing cheaper anytime soon. First-quarter reports from the financial industry have been robust so far, an encouraging sign for the broader economy.