- Today's Scoop:
Hey friend - it’s election day. Make sure you get out and vote!
Here’s what you need to know today…
More Americans are falling behind on credit card payments.
Used car prices are coming down.
Rents are getting cheaper in major cities.
Check out more newsletter recommendations from Beehiiv:
The Market: ⬆️ +0.3%
S&P 500: 4,378.38
1Mo: +1% | 1Yr: +14% | 5Yr: +57%
The market kept cruising higher for the seventh straight day, marking the longest hot streak in over a year. Corporate financial reports have been better than expected.
More Americans are falling behind on their credit card payments, particularly Millennials and Gen Z. The New York Federal Reserve reported credit card delinquency rates have risen quickly from low levels over the past few years, especially among younger generations and those with student loan debt. Total credit card debt jumped last quarter by the most in the Fed’s 24-year history. Many Americans have spent the extra cash built up from the pandemic and now face higher living expenses and more expensive borrowing costs. Average credit card interest rates are over 20%, making it more difficult for consumers to pay off their balances.
The cost of used cars finally came down last month. According to the Manheim Used Vehicle Value Index, wholesale used-vehicle prices fell by 2.3% in October after increasing in August and September. Average used vehicle prices more than doubled during the pandemic as supply chain disruption delayed new car production and refocused buyers on the limited supply of used cars. Prices have come down from the peak but are only 4% lower than last year.
Rents in some of America's fastest-growing cities are starting to come down. Metro areas like Atlanta, Austin, and Phoenix have seen an explosion in new rental construction over the past two years, which has helped bring down rental costs as landlords try to fill rooms. Despite the slight decline, rents are still much higher than before the pandemic and unaffordable to many Americans. Rents in many northern US metro areas are still climbing where there was less new supply added.
How are you feeling about the economy?
Company Scoops 🗣️🌎💰
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Inside Scoop 🤓
How do investors reward shareholders?
Companies with extra cash can reward shareholders for their support in two ways. First, they can distribute money directly out to investors, literally giving them a share of the profits by paying them a dividend. Companies will declare that every investor gets $X for each share they own. As a stock owner, you’ll literally get paid your share of the company’s profits in cash into your account every three months.
Second, companies can buy back their own shares from public investors. Buybacks allow companies to reduce the number of outstanding shares in the market, making each remaining share more valuable. They're slicing their company ownership into fewer pieces, allowing each shareholder to own a greater percentage of the company.
If companies pause or slow either of these activities, it can mean they're preparing for trouble.