Markets ease higher today after stong advances during 204

Dow was up 31, advancers over decliners about 3-1 & NAZ gave back 50.  The MLP index crawled up 1+ to the 294s & the REIT index added 2+ to the 398s.  Junk bond funds inched higher & Treasuries were flattish, keeping yields about even (more below).  Oil rose but stayed in the 71s & gold gained 19 to 2637.

Dow Jones Industrials

Experts are sounding the alarm over a new report indicating credit card loan defaults soared this year, warning the dam is about to break on Americans' record-high consumer debt.  During the first 9 months of 2024, lenders wrote off more than $46B in seriously delinquent credit card loans, according to a report from the Financial Times citing data analyzed by BankRegData.  That's an increase of 50% from the first 3 qtrs of 2023 & the highest since 2010.  "High-income households are fine, but the bottom third of US consumers are tapped out," Mark Zandi, head of Moody's Analytics, said.  "Their savings rate right now is zero."  Pointing to the findings, The Kobeissi Letter declared, "The credit card debt bubble is popping."  The New York Federal Reserve reported last month that Americans' credit card debt hit another record high in Sep, climbing to $1.17T during the 3rd qtr, marking the highest level on record in Fed data dating back to 2003.  The report showed total household debt also climbed to a new high of $17.94T, along with balances on mortgages ($12.6T), auto loans ($1.6T) & student loan balances ($1.6T).  New York Fed researchers discussed the growth in debt balances across the board, the persistent & "concerning" growth in auto loan & credit card delinquencies, & how stresses & high delinquency rates are concentrated among younger borrowers.  "We've seen notably elevated flows into delinquency, particularly for credit cards as well as auto loans during the past few years," one researcher said.  "This is something that we have been pointing to as a reason for concern — something to keep an eye on."  They pointed to the rise in payments consumers are making on credit cards & auto loans, which is attributed partly to inflation & also because of higher interest rates.

US credit card defaults soar to highest level in 14 years

Treasury yields were lower, in the final trading day of the year, but the benchmark 10-year yield is still on track to end the year solidly higher.  The yield on the 10-year Treasury was down by 2 basis points at 4.527% & the 2-year Treasury yield was last down 3 basis points at 4.225%.  Yields & prices move in opposite directions& 1 basis point is equivalent to 0.01%.  The fall in yields extended yesterday's declines, which came after the 10-year Treasury yield hit a multimonth high last week after rising distinctly across the last 3 months of the year.  Those swings are a fitting end to a choppy year in the bond market. The 10-year Treasury yield began the year below 3.9% before jumping to 4.7% in the spring.  It then retreated to below 3.7% in Sep before bouncing higher again.  Conflicting economic data & changing rate outlooks have fueled those swings.  The US economy has proven to be stronger than many economists expected at the beginning of the year, but inflation is still above 2%.  The Federal Reserve did begin cutting rates in Sep, but traders have now dialed back expectations of further reductions in 2025.  The rate cuts have led to lower short-term yields, but long-term yields are still higher on the year.  This means that the yield curve is no longer inverted, but the moves have hurt many investors' performance & is keeping mortgage rates elevated.  Many funds focused on long-term debt will finish 2024 with negative returns.

Treasury yields pull back on last trading day of 2024

It was a big year for silicon in Silicon Valley, but a brutal 1 for the company most responsible for the area's moniker.  Intel (INTC), a Dow stock & the 56-year-old chipmaker co-founded by industry pioneers Gordon Moore & Robert Noyce, had its worst year since going public in 1971, losing 61% of its value.  The opposite story unfolded at Broadcom (AVGO), the chip conglomerate run by CEO Hock Tan & headquartered in Palo Alto, California.  AVGO's stock price soared 111% in 2024 as of yesterday, its best performance ever.  The current company is the product of a 2015 acquisition by Avago, which went public in 2009.  The driving force behind the diverging narratives was artificial intelligence.  AVGO rode the AI train, while INTC largely missed it.  The changing fortunes of the 2 chipmakers underscores the fleeting nature of leadership in the tech industry & how a few key decisions can result in hundreds of Bs of $s in market cap shifts.  AVGO develops custom chips for Google (GOOG) other huge cloud companies.  It also makes essential networking gear that large server clusters need to tie thousands of AI chips together.  INTC was up 27¢ today & AVGO fell 1.49.

Silicon Valley’s turn of fortune: Intel has worst year ever, while Broadcom enjoys record gain

Stocks slipped, continuing an uncharacteristic limp to the finish after a roaring year of trading.  Despite the sour final stretch, the Dow has posted a modest 13% gain & the tech-heavy NAZ is up almost 30%.  Meanwhile, the Federal Reserve made its first interest rate cut in 4 years & Pres-elect Donald Trump's impending return to the White House drove stocks higher in the last 2 months.