💳 Is US Consumer Debt Out Of Control?

Good morning. US stock futures dipped in Monday morning trading as investors geared up for a busy week of economic data.

💳 US consumer borrowing keeps rising

📝 Our report: American consumers had their credit cards doing some serious cardio in February, with consumer borrowing getting a boost fueled by the biggest surge in credit-card balances seen in three months. Total credit rose $14.1 billion after a revised $17.7 billion gain in January, according to the Federal Reserve’s recently released credit data.

 🔑 Key points:

• Revolving credit, which includes credit cards, climbed $11.3 billion in February. Non-revolving credit, such as loans for vehicle purchases and school tuition, increased $2.9 billion. The figures aren’t adjusted for inflation.

• Robust job growth continues to drive household spending, though consumers’ credit-card balances are mounting. With accounts carrying higher interest rates and monthly payments taking a bigger chunk of their paychecks, those borrowers could be at risk should the economy and labor market weaken.

• The Fed’s report also showed for credit cards that charge interest, that rate is now 22.63%. It was under 17% before the start of the pandemic.

💡 So what: The rise in US consumer debt suggests increased spending, which can stimulate economic growth in the short term. However, it also raises concerns about financial stability if consumers struggle to repay their debts, potentially leading to defaults and economic downturns. Additionally, high levels of debt can limit consumers' ability to save and invest for the future, impacting long-term financial security.

Monday - No Major Economic News

Tuesday - NFIB Optimism Index

Wednesday - Consumer Price Index, Chicago Fed President Austan Goolsbee Speaks, Minutes of Fed's March FOMC Meeting

Thursday - Boston Fed President Susan Collins Speaks

Friday - Consumer Sentiment

📈 A list of investing lessons from Peter Thiel

💰 Here’s how you can avoid junk fees!

💸 This is how much people around the world say they need to earn to feel financially secure!

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🎶 Apple changes streaming tune in Europe

WHAT: Apple just dropped the beat with its latest move: they're making it simpler for music streaming apps in the European Economic Area to clue users in on other ways to snag digital goodies. The announcement comes weeks after the iPhone maker was fined 1.84 billion euros ($1.99 billion) by the EU for thwarting competition from music streaming rivals via restrictions on its App Store.

WHY: The European Commission had said in March that Apple's restrictions constituted unfair trading conditions and that it should stop such conduct. Following a 2019 complaint by Swedish streaming service Spotify, the Commission charged Apple last year with preventing the Swedish company and others from informing users of payment options outside its App Store.

🏪 Bye bye 99 Cents Only stores

WHAT: Well, it looks like the 99 Cents Only Stores are closing shop, putting an end to their four-decade reign of offering everything from quirky finds to random bargains. Interim CEO Mike Simoncic said in a statement that the retailer has struggled for years as a result of the COVID-19 pandemic, changes in consumer demand, inflation and rising levels of product “shrink” — a measure that encompasses losses from employee theft, shoplifting, damage, administrative errors and more.

WHY: 99 Cents Only Stores was founded in 1982 by Dave Gold, who opened its first store in Los Angeles at the age of 50, according to his 2013 obituary in the Los Angeles Times. The shuttering of 99 Cents Only Stores comes after fellow discount retailer Dollar Tree last month said it was closing 1,000 stores.

🤖 Musk, investors in talk to raise billions for AI company

WHAT: Elon Musk's pals are apparently lining up to splash some cash at his AI startup xAI, with talks swirling around a potential $3 billion funding round. According to the Wall Street Journal, terms of the xAI fundraising were not finalized and the plans could change, as such a round would value the company at $18 billion.

WHY: Seeking an alternative to Microsoft-backed OpenAI and Alphabet's Google, Musk launched xAI last year. Earlier this year, Musk said xAI was not in talks with investors to secure funding, following a media report about the startup raising up to $6 billion.

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