Personal finance weekly news roundup August 10, 2024 ~ Credit Sesame

Credit Sesame’s personal finance news roundup August 10, 2024. Stories, news, politics and events impacting personal finance during the past week.

Manufactured goods orders fall

The Census Bureau reported that new orders for manufactured goods fell by 3.3% in June 2024. This was the second consecutive monthly decline, following four consecutive monthly increases. Weakening demand for transportation equipment was the main reason for the decrease, as new orders for transportation equipment were down by 20.6% in June. See details at Census.gov.

Recession fears trigger panic in world markets

A relatively weak US employment report last week seems to have triggered panic in global stock markets. The Nasdaq and S&P 500 indexes started the week with 3% declines. Japan’s Nikkei stock index lost 12.4% on Monday, its worst day since 1987’s Black Monday. Concern over economic weakness started a chorus of pleas for the Federal Reserve to cut interest rates. However, given high debt levels and rising delinquency rates, it’s not clear that facilitating more borrowing would cure the economy’s ills. See article at Reuters.com.

Recession fears trigger drop in mortgage rates

Negative news on the economy may have been bad for stock market investors, but it provided a welcome drop in mortgage rates for would-be home buyers. 30-year mortgage rates fell by 0.26% last week to 6.47%. Mortgage rates are the lowest in over a year. 30-year rates are now 0.14% lower than they were at the start of 2024. 15-year rates experienced an even larger one-week plunge, falling by 0.36% to 5.63%. That’s 0.30% lower than the start of the year. See rate details at Freddie Mac.com.

Consumer debt continues to grow

The total amount of consumer debt outstanding reached another all-time high in the second quarter of 2024. The total consumer debt balance owed is now $17.80 trillion. That’s a $109 billion increase from the previous quarter. Credit card debt had the fastest percentage growth rate during the quarter, rising by 2.4% to reach $1.142 trillion. Credit cards also had the fastest flow of debt into serious delinquency. 7.18% of credit card debt became 90 days or more overdue during the second quarter of 2024. See Household Debt and Credit Report at NewYorkFed.org.

Morgan Stanley breaks taboo Bitcoin ETFs

Morgan Stanley has become the first major bank to permit its sales force to sell Bitcoin-backed exchange-traded funds to its customers. Major banks have shied away from these products because of difficulties squaring a no-dividend, speculative product with client suitability requirements. However, Morgan Stanley will allow its 15,000-strong sales force to include Bitcoin ETFs alongside the more conventional securities it can sell to customers. See article at Yahoo.com.

FDIC looks into uninsured deposits

The FDIC has requested more information from its member banks about uninsured deposits. These are accounts that exceed the individual deposit insurance limit of $250,000. These deposits are not normally protected from bank failures by the FDIC insurance fund, though the FDIC made exceptions during last year’s bank failures. As these failures demonstrated, uninsured deposits not only represent a risk to the depositors but can also threaten the stability of the banks that hold them. There are an estimated $7.7 trillion dollars in uninsured deposits held by US banks, representing 43% of domestic deposits. See article at PYMNTS.com.

Habitual bettors more likely to exhibit financial distress

A new TransUnion survey found that people who bet in excess of $500 a month show more signs of financial distress than non-bettors. Nearly twice as many heavy online bettors expect to be unable to pay a bill or loan in full. They are more than twice as likely to have 90+ days overdue payments during the past year. Bettors are more than three times as likely as non-bettors to have been contacted by a collection agency within the past year and 14 times as likely to have been ordered by a court to make a child support payment within the past month. See article at TransUnion.com.

Weekly news headlines from Credit Sesame