In 2023, the Poor Will Get Poorer

The writing on the wall has never been more clear [View in browser]( Proprietary Data Insights Top Stock Searches This Month Rank Name Searches #1 Tesla 1,131,908 #2 Apple 603,343 #3 Eversource Energy 584,381 #4 Amazon.com 426,856 #5 Nvidia 247,834 #ad [Where the Big Money’s Looking]( Consumers In 2023, the Poor Will Get Poorer Key Takeaways: - Strong consumers managing debt well definitely exist. - However, it’s the struggling consumer who might be about to implode we should be worried about heading into 2023. - Discouraging data in the used car market adds to our concerns and our haves and have nots economic thesis. We called the economy dichotomous in 2022. A segment of consumers crushing it financially, spending without much regard for the rising cost of most everything. These are the people presumably responsible for this bullish hospitality industry data [we passed along the other day](: - In November, restaurants and bars in the U.S. did more than $90 billion in sales. That’s a record high. - They’re on pace to cross $1 trillion in annual sales for the first time ever. They’re also traveling again. They’re the relatively well-heeled [the banks refer to as “strong” consumers]( when reporting earnings and still-low credit card delinquencies, particularly among borrowers with high credit scores. But what about the low credit score, or subprime borrowers? What about them? Certainly, they help contribute to the [massive increase in credit card debt](. Logic tells us they’re probably mostly responsible for the crash in personal savings. At the same time - as The Juice relayed the other day - Transunion expects credit card delinquencies to increase in 2023, particularly among borrowers with bad credit. If you have a credit score between 501 and 600, you’re considered subprime. In the 300 to 500 range, you’re deep subprime. Interestingly, about 23% of public auto loans go to subprime and deep subprime consumers. Among these borrowers, auto loan delinquencies have risen rapidly since 2019: - In November 2019, 4.3% of subprime auto loans were 60 days past due. That number hit 5.9% this November. - In November 2019, 5.9% of deep subprime auto loans were 60 days past due. That number popped to 8.2% last month. If this isn’t more evidence of a dichotomous economy and subsequent writing on the wall for a consumer debt crash, especially among struggling consumers, we don’t know what is. The Bottom Line: In 2023, The Juice will keep our eye on three things as it pertains to consumer debt: - Credit card debt delinquencies - Auto loan delinquencies - Mortgage loan delinquencies and foreclosures - Non-payment of rent Logic dictates that when you’re hurting and have to make tough budget decisions, you miss or stop making credit card payments first. Then, the car payment, because you can live without a car. Might not be easy, but you can do it. You do everything in your power to make your house payment. No matter how well you’re doing financially today, there’s a good chance you’ve been in this or a similar situation before. Or you at least know somebody who has struggled to pay the bills. It’s sort of a domino effect. One we’ll pay close attention to in 2023. News & Insights Freshly Squeezed - [Short Positions on Tesla Stocks Remain Profitable]( - [Don’t Miss These 3 Investment Trends for 2023]( - [Housing Recession is Already Here, According to Some Economists]( - [12 Dividend Stocks That are Down Over 30% YTD]( [We want to hear from you! Let us know your thoughts by clicking here]( [Link]( # [submit to reddit]( [submit to reddit]( [submit to reddit]( [submit to reddit]( To ensure delivery of all emails, [allow us on your list]( Juice&email=TheJuice@news.investingchannel.com). Update your email preferences or unsubscribe [here](. Manage your subscriptions with our [preference center]( View our privacy policy [here](. Copyright ©2022 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc., newsletter is for information purposes only and is based on opinion. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or eliminate losses. InvestingChannel, Inc., makes no representation or implication that using any of the methodologies or systems in this newsletter will generate returns or insure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions.