1. Company commentary…
We’ve seen a shift in corporates talking up their expense management over pricing power as inflation lingers on. Retail is a particularly interesting sector where we are keeping watch of slowing top lines, and price/cost being used to manage margins.
Source: Goldman Sachs Global Investment Research (May 2024)
2. Plastic not so fantastic…
One in six Americans from the poorest 10% of ZIP (Postal) codes are in credit card debt delinquency, according to the Fed. The share of people in delinquency in these areas has increased from 11% in Q2 2021 to 17% in 1Q 2024, the highest in 21 years. Meanwhile, the share of people with delinquent credit card debt nationally is at ~12%, the largest since 2003.
For 90% of Americans, delinquency rates on credit card debt are now above levels seen in the 2008 Financial Crisis. And it is the younger generations who are more likely to be maxed out on their credit card debt.
Source: Federal Reserve Bank of New York/Equifax Consumer Credit Panel and authors’ calculations. (May 2024)
Source: New York Fed Consumer Credit Panel and Equifax (May 2024)
3. Fuelling the fire…
Researchers have recorded the largest jump in global average carbon dioxide emissions at the Mauna Loa Observatory. The global average concentration of carbon dioxide in March this year was 4.7 parts per million (or ppm) higher than it was in March last year. The rise of AI, and the energy required to power the advanced computing, isn’t helping corporate sustainability agendas. But at least we are seeing a surge in supply of clean jet fuel, with the US recording a record amount in Q1.
Source: Scripps Institution of Oceanography and Bloomberg (May 2024)
Source: Microsoft and Bloomberg (May 2024)
Source: EPA, BloombergNEF (May 2024)