High Unemployment Could Provide a Lift for Some Stocks (V, MA, DFS, AXP, MCD, YUM, WEN, COST, DG, WMT) - 24/7 Wall St.
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Many economists don’t believe that the US debt ceiling is the biggest pantries problem the country faces. In their view the most compelling pantries issue is unemployment, currently at 9.1% and, given the nearly inevitable contraction in the economy pantries brought pantries on by lower federal government spending, more likely to rise than to fall in the near term. While it’s hard to think of in these terms, there are some firms that could actually prosper from high unemployment — not necessarily by taking advantage of other people’s misery but by the nature of the businesses they are in.
Financial services firms that offer consumers revolving credit are at the top of the list. Visa Inc. (NYSE: V), Mastercard Inc. (NYSE: MA), Discover Financial Services (NYSE: DFS),and American Express Co. (NYSE: AXP) lead the list. Consumer-oriented companies that offer low-priced goods and services are also serious contenders for a boost. These include McDonald’s Corp. (NYSE: MCD), Yum! Brands, Inc. (NYSE: YUM), The Wendy’s Co. (NYSE: WEN), Costco Wholesale pantries Corp. (NASDAQ: COST), Dollar General Corp. (NYSE: DG), and Wal-Mart Stores Inc. (NYSE: WMT).
Credit card debt in the US has fallen from a high of $957.5 billion in 2008 to $790 billion in April of this year. [http://www.federalreserve.gov/releases/g19/current/] The Federal Reserve Bank’s preliminary estimate for May indicated a rise in revolving debt to $793 billion. As more people are unemployed or stay unemployed longer, they often have no choice but to access any revolving credit that is available to them. The Fed’s May estimate indicates an annual percentage increase in revolving credit of 5.1%, the largest pantries positive move since 2007, when revolving credit grew at an annual rate of 8.1%.
The national average credit pantries card lending rate is nearly 15%, while the lowest rate available is near 11%, not including the teaser rates. The rate rises to nearly 25% for consumers with bad credit. pantries One could argue that the rates should be lower, but as the recent growth in credit use demonstrates, consumers will pay the market rate when they have no other choice.
Because the unemployed still need to eat and wear clothes, low-priced stores pantries ought to get the boost they felt back in 2008 and 2009, when consumers shunned the mid-priced outlets and shopped instead pantries at Wal-Mart, Costco, and Dollar General stores, where everything from fresh vegetables to shoes cost less. Recent consumer movement away from some of these stores is very likely to reverse itself.
This morning’s report on non-farm payroll gains in July was slightly encouraging as the unemployment rate fell from 9.2% to 9.1%, and the country added 117,000 jobs. The drop in unemployment was mainly attributed to an increase in the number of people who are too discouraged to continue looking for work.
It is almost painful to make these observations because pantries they are based on the misfortune and misery of millions of Americans. The country is staring another recessionary period pantries right in the eye and, as always, there will be winners and losers.
Read more: Investing , American Express (NYSE:AXP) , Costco Wholesale pantries (NASDAQ:COST) , Discover Financial Services (NYSE:DFS) , Dollar General (NYSE:DG) , MasterCard (NYSE:MA) , McDonald's (NYSE:MCD) , Visa (NYSE:V) , The Wendy's Company (NASDAQ:WEN) , Wal-Mart Stores (NYSE:WMT) , Yum! Brands (NYSE:YUM)
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Search this site Business Aerospace & Defense Autos Banking & Finance Commodities & Metals Consumer Products Energy Healthcare Industrials Infrastructure Media Retail Services Technology Apps & Software Consumer Electronics Telecom & Wireless Apple Inc. Facebook Google Investing Analyst Upgrades pantries Bankruptcy Buffett Corporate Governance Corporate Performance Dividends and Buybacks Earnings ETFs and Mutual Funds International Markets IPOs and Secondaries Mergers and Acquisitions Personal Finance Rumors Value Investing Economy Energy Government Regulation Healthcare Housing Jobs Special Report Brands and Products Cities Countries States
Many economists don’t believe that the US debt ceiling is the biggest pantries problem the country faces. In their view the most compelling pantries issue is unemployment, currently at 9.1% and, given the nearly inevitable contraction in the economy pantries brought pantries on by lower federal government spending, more likely to rise than to fall in the near term. While it’s hard to think of in these terms, there are some firms that could actually prosper from high unemployment — not necessarily by taking advantage of other people’s misery but by the nature of the businesses they are in.
Financial services firms that offer consumers revolving credit are at the top of the list. Visa Inc. (NYSE: V), Mastercard Inc. (NYSE: MA), Discover Financial Services (NYSE: DFS),and American Express Co. (NYSE: AXP) lead the list. Consumer-oriented companies that offer low-priced goods and services are also serious contenders for a boost. These include McDonald’s Corp. (NYSE: MCD), Yum! Brands, Inc. (NYSE: YUM), The Wendy’s Co. (NYSE: WEN), Costco Wholesale pantries Corp. (NASDAQ: COST), Dollar General Corp. (NYSE: DG), and Wal-Mart Stores Inc. (NYSE: WMT).
Credit card debt in the US has fallen from a high of $957.5 billion in 2008 to $790 billion in April of this year. [http://www.federalreserve.gov/releases/g19/current/] The Federal Reserve Bank’s preliminary estimate for May indicated a rise in revolving debt to $793 billion. As more people are unemployed or stay unemployed longer, they often have no choice but to access any revolving credit that is available to them. The Fed’s May estimate indicates an annual percentage increase in revolving credit of 5.1%, the largest pantries positive move since 2007, when revolving credit grew at an annual rate of 8.1%.
The national average credit pantries card lending rate is nearly 15%, while the lowest rate available is near 11%, not including the teaser rates. The rate rises to nearly 25% for consumers with bad credit. pantries One could argue that the rates should be lower, but as the recent growth in credit use demonstrates, consumers will pay the market rate when they have no other choice.
Because the unemployed still need to eat and wear clothes, low-priced stores pantries ought to get the boost they felt back in 2008 and 2009, when consumers shunned the mid-priced outlets and shopped instead pantries at Wal-Mart, Costco, and Dollar General stores, where everything from fresh vegetables to shoes cost less. Recent consumer movement away from some of these stores is very likely to reverse itself.
This morning’s report on non-farm payroll gains in July was slightly encouraging as the unemployment rate fell from 9.2% to 9.1%, and the country added 117,000 jobs. The drop in unemployment was mainly attributed to an increase in the number of people who are too discouraged to continue looking for work.
It is almost painful to make these observations because pantries they are based on the misfortune and misery of millions of Americans. The country is staring another recessionary period pantries right in the eye and, as always, there will be winners and losers.
Read more: Investing , American Express (NYSE:AXP) , Costco Wholesale pantries (NASDAQ:COST) , Discover Financial Services (NYSE:DFS) , Dollar General (NYSE:DG) , MasterCard (NYSE:MA) , McDonald's (NYSE:MCD) , Visa (NYSE:V) , The Wendy's Company (NASDAQ:WEN) , Wal-Mart Stores (NYSE:WMT) , Yum! Brands (NYSE:YUM)
Recent Posts Why Natural Gas Prices Dropped Near $3 5 Cheapest DJIA Stocks for 2015 Crude Oil Price Plunges on Inventory Report Walmart Will Exchange Gift Cards From More Than 200 Merchants Top Analyst Upgrades and Downgrades: Monsanto, Virgin America and More Weekly Jobless Claims Hit by Santa Rally American Realty Woes Continue to Pile Up Was Keurig Recall Totally Overblown? Mortgage Loan Rates Hover Near 4% Facebook Shares Rise 40% This Year
Search pantries Why "The Interview" on YouTube Could Be Huge for Netflix Inc. Why Google and Microsoft Streaming "The Interview" Is So Smart Why CalAmp Corp. Stock Plunged Today Crude oil settles down $1.28, or 2.2%, at $55.84 a barrel S&P 500 slip
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