Latest / Markets with Megan: A Quick Financial Markets Update / Optimism Amid Challenges: Small Businesses and the Surge in Consumer Credit | Episode 089 | 01-09-2024

Transcript

Optimism Amid Challenges: Small Businesses and the Surge in Consumer Credit | Episode 089 | 01-09-2024 · Markets with Megan: A Quick Financial Markets Update

• 0:02
  Speaker 0: Hello, this is Megan Horneman, the Chief Investment Officer for Verdence Capital Advisors.
• 0:06
  Speaker 0: We're coming to you today with our regular segment of Markets.
• 0:09
  Speaker 0: With Megan, we're going to talk a little bit about the Small Business Optimism Index that came out today.
• 0:14
  Speaker 0: This measures sentiment among the small business owners in the country, and we actually saw this increase.
• 0:20
  Speaker 0: This was the biggest increase we've seen and actually the first increase since July of 2023.
• 0:27
  Speaker 0: When we go through some of the details, some of the things that led this index slightly higher was those expecting a better economy, those expecting higher sales and then a positive earnings trend.
• 0:43
  Speaker 0: These things all, even though they were better than they were the prior month.
• 0:47
  Speaker 0: They're still in negative territory, so less bad than they were last month.
• 0:51
  Speaker 0: However, what some of the business owners had referenced was that it was a better than expected holiday shopping season in December.
• 0:59
  Speaker 0: Now, one of the other things that we got yesterday for the month of November which really went under the radar and not many people talked about, was consumer credit, and we saw a massive increase in consumer credit in the month of November, so this was leading up into the December holiday season.
• 1:16
  Speaker 0: The increase was specifically led by revolving credit, which is credit cards, and we've talked a lot about this where consumers are continuing to spend, but small businesses are happy about that.
• 1:29
  Speaker 0: It's good for them, but yet they're doing this relying on credit cards.
• 1:33
  Speaker 0: And when you look at the actual number, so at about $1.3 trillion, it's a record high for the amount of money on credit cards and the increase in November that was actually the biggest increase that we've seen since early 2022, and that's on a month-over-month basis.
• 1:53
  Speaker 0: So businesses are liking the fact consumers are still spending.
• 1:57
  Speaker 0: I don't know how consumers are still spending.
• 2:00
  Speaker 0: I don't know what's going to make them pause and stop using credit card debt.
• 2:05
  Speaker 0: I mean, rates are near a record high, so this is concerning, and the longer that this goes on, the more concerned we get about how the fallout may be from an economic perspective.
• 2:14
  Speaker 0: So we'll keep watching economic data.
• 2:17
  Speaker 0: We've got some more coming to you this week.
• 2:18
  Speaker 0: We've got inflation data coming out, so we'll be back with some more markets with Megan.
• 2:22
  Speaker 0: If you have any comments or questions, please feel free to reach out to podcast at Verdence dot com.
• 2:27
  Speaker 0: Thank you.