The Fed's latest data reveals a staggering $17.6 billion increase in revolving credit in March, marking the largest monthly surge in a year and one of the biggest on record. This credit surge is largely attributed to ever-increasing household credit card debt. In fact, the total credit card debt in the US is anticipated to surpass the historic $1 trillion mark this year, indicating a disturbing trend of Americans relying on credit cards to finance their inflated expenses. As per Bloomberg, over 50% of Americans cannot afford a surprise $400 expense without adding debt. With the average interest rate hitting an all-time high of 20.9% in February, this reliance on credit card debt is a recipe for long-term economic disaster for individuals and the nation.
The Dow and S&P 500 fell on Thursday, with Walt Disney Co. weighing down the indexes due to a drop in Disney+ membership. The Nasdaq, on the other hand, surged thanks to a 4.3% gain in Alphabet stock, a day after Google introduced new AI technologies to compete with Microsoft. Tesla stock jumped in late trade after Elon Musk announced that he had chosen a new CEO for Twitter.
Gold prices held above key levels despite reversing all gains for the week due to concerns over the economic slowdown and US banking crisis. Despite sticky US inflation data reducing the likelihood of rate cuts by the Federal Reserve, the market expects a rate hold, which will set future expectations and stagnate the market.
Oil prices fell on Friday due to concerns over crude demand this year, following disappointing economic signals from China and concerns over a potential US recession. Weak data from China outweighed the OPEC forecast that China would drive oil demand to record highs this year. Signs of a labour market slowdown in the US and fears of a banking crisis also weighed on oil markets, along with the US debt limit discussions and a sharp recovery in the dollar.
The US dollar strengthened as investors sought safety after a series of economic data prompted a reassessment of their outlook for global monetary policy. A rise in unemployment claims in the US could give the Federal Reserve room to halt further interest rate increases next month. US producer prices, however, showed a moderate rise last month, posting the smallest annual increase in producer inflation in more than two years.