/biz/ - Business & Finance

https://www.investing.com/news/economy/us-consumer-borrowing-cools-as-creditcard-debt-growth-slows-2935119
November 7, 2022
>Total credit increased $25 billion from the prior month, Federal Reserve figures showed Monday. The median forecast in a Bloomberg survey of economists called for a $30 billion advance
>As a result, some households are beginning to tighten their belts. Visa Inc (NYSE:V). and Mastercard Inc (NYSE:MA). both noted recently that spending growth had slowed.
https://finance.yahoo.com/news/visa-spending-growth-slows-consumers-202111553.html
October 25, 2022
>Visa’s Spending Growth Slows as Consumers Hit by Inflation
The consumer is tapped out. Earnings growth will inevitably slow. The consumer cannot borrow more and spend their way out of inflation
The more the market rallies, the more financial conditions will ease - the Fed does not want this. The Fed will send people out to say hawkish lines to try to kill the rally
High inflation in a time of very low savings rates and extremely high credit card debt is a recipe for disaster; going on at a time when the Fed wants to see the unemployment rate rise from 3.7% to 5%
November CPI = Tuesday, December 13, same day as the first day of the December Fed meeting. There will be very little time for the market to process it, as the next day, the 14th = Fed decision / press conference
~January 15 to Feb 28 = Q4 earnings; likely worse than Q3. Possible the job cuts will result in a mixed bag for profits. More likely it will result in decrease in revenues, decrease in profits due to the overall global economic backdrop
The professionals must get their end of the year bonuses. We will rally in the short run - mild pull back consolidation this coming week before rallying further. However.. Do not forget the backdrop. Do not forget that there is a time limit on this rally - do not forget that the music will soon stop playing. Enjoy the party, but don’t drink the kool aid