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Proprietary Data Insights Top Big Bank Stock Searches This Month
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A couple months ago, The Juice asked, Can You Trust Big Banks? Specifically when these banks speak about the strength of the American consumer. Because for months, what they say they see doesn’t jibe with reality, or at least the data on spending, savings, and debt. In a nutshell, pretty much every datapoint we see trends in the wrong direction. A bad direction for a large swath of financially struggling consumers. And a new 2023 outlook from TransUnion predicts more doom and gloom. Details in a second, but first… TransUnion released related data that shows banks aren’t the only ones fooling themselves, and us. The American consumer might be denying their personal financial realities too. In TransUnion’s words, “Consumer optimism held despite worsening household finances.” As one of the nation’s big three credit reporting agencies, Transunion probably knows a thing or three about what’s happening. As for what the consumers they survey are telling them:
A mixed bag. Could it be as simple as the optimists are doing well, so they’ll keep spending and managing debt effectively, while the pessimists will run into trouble? Maybe, though we’re not sold. When people self-report this type of data, let’s face it: They often lie. Nobody likes to admit they’re having money problems. To themselves and definitely not to others. Then there’s this, directly from TransUnion’s report that broadly states that “Consumers continue to turn to credit cards”:
The more optimistic of those surveyed were likelier to say they’ll take on more debt in 2023. This anticipated rush of new credit in the new year, combined with the concerning data we’re about to tell you about, puts even more writing on the wall. The story we’ve been telling on debt throughout 2022 could get a lot worse in 2023. Scroll with us… |
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The Consumer Economy |
Consumer Debt: Don’t Say We Didn’t Warn You |
Key Takeaways:
The Juice has three primary goals: To make sense of the economy, so together, we can be better with money and become better investors. To achieve these goals, we love weaving a narrative around the data trail we follow over time. It’s long- and well-established that credit card debt is soaring while personal savings are rapidly dwindling:
We just established, via TransUnion, that quite a few Americans plan to take on even more debt in the new year, especially credit card debt. Alongside this data, TransUnion reports something interesting about existing debt headed into 2023:
TransUnion’s take on the situation: Credit card balances are forecast to rise over the course of the year as many consumers continue to turn to cards to help them manage cash flows. We expect card delinquency to increase in 2023 as consumers face liquidity shortages from the prolonged high inflation environment, slowing wage growth, and expected increases in unemployment. [Emphasis added] We’ll go ahead and call that pessimistic writing on the wall. The Bottom Line: Across the board, search interest among investors is down over the last week for the top five big bank stocks in Trackstar, our proprietary sentiment indicator:
We think investors are losing interest in bank stocks, in part, because they might be in for a rough 2023. TransUnion laid out the reasons: persistent inflation, slowing wage growth, and potential increases in unemployment. These things, combined with the bleak savings-vs.-debt equation, paint a tricky picture if you’re in the business of lending people money. |
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