Ariff Azraei

Can you pay? Major US banks have reported that consumers are starting to fall behind on their credit card and loan payments. Although delinquency levels remain low, the softening economy is making it harder for businesses to refinance. The banks, including Bank of America, JPMorgan Chase, Wells Fargo, and Citigroup, exceeded analyst forecasts for Q1 2023 profits, benefiting from rising interest rates. However, bank executives warned that this strength would not last due to the looming recession, which will cause customer delinquencies to rise. While delinquency rates have slowly increased, consumers and businesses are generally strong. Nevertheless, Citigroup expects delinquency rates to return to average levels of 3-3.5% for branded cards and 5–5.5% for retail services by early 2024.
The S&P 500 rose slightly on Tuesday as gains in big tech countered disappointing earnings reports from Johnson & Johnson and Goldman Sachs. The Dow and Nasdaq both ended the day with fractional changes. The early quarterly results from S&P 500 companies come as investors brace for a gloomy reporting season.
Gold prices bounced back on Tuesday after two consecutive losses that briefly pushed prices below $2,000 an ounce. Renewed expectations of the Federal Reserve extending its rate hike cycle caused the price drop. Resistance in 2008 and 2010 are its current targets to the upside, with little risk of a downside.
Oil prices rose in early Asian trade due to falling U.S. crude inventories and strong Chinese economic data indicating increased fuel demand, but fell on strong dollars. China's economy grew faster than expected in Q1, and its oil refinery throughput reached record levels in March, which is hoping to improve further demand.
The US dollar fell on Tuesday, following better-than-forecast GDP growth data from China, while strong pay figures from the UK supported the pound. China's gross domestic product grew 4.5% year on year in the first quarter of 2023, beating analyst forecasts. Reserve Bank of Australia minutes showed the central bank considered an 11th consecutive rate hike in April before deciding to pause.

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