The S&P 500 has been on another tear in recent weeks, hitting 10 new all-time highs in the last 19 trading sessions. Traders were optimistic over corporate earnings and trade deals with Japan and the Philippines, hopefully to be followed soon by the European Union before next week’s tariff deadline. 

According to a report released by the nonpartisan Congressional Budget Office, “the Big, Beautiful Bill will produce a $4.5 trillion decrease in revenues and a $1.1 trillion decline in spending over the next decade, adding a projected $3.4 trillion to the national debt over that period.” The report also expects that provisions in the law will result in a loss of health insurance for as many as 10 million Americans through 2034. At the request of Senate Republicans, a different model was scored relative to a current policy baseline. The second model showed a reduction in deficits of $366 billion in the next decade. 

Narratives of deterioration in loan quality continue after LendingTree reported 5.1% of Americans are now delinquent on auto loans. LendingTree’s report showed 2% at least 30 days late and nearly 1% over 90 days late. Experian shows that 30+ day delinquencies are up 40% YoY in the lowest credit tier. The Fed reports total auto loan balances have reached $1.6 trillion and the average monthly car payment is $750. According to some indices, used auto prices are starting to correct downward, leaving many borrowers even more underwater than they were. In mortgage lending, the national delinquency rate is only 3.2%. However, VantageScore and Investopedia report that early delinquencies are rising faster than on any other type of consumer credit. The average home price rose 2% last month to $435,500. The supply isn’t bringing prices down while mortgage rates finally start to drift below 7% again. Most lenders would probably agree that cars and homes are the final items on which consumers miss payments and could portend a difficult road ahead for both sectors.

KEY INDICATORS THIS WEEK

Conference Board Leading Economic Index- fell 0.3% for June, resulting in a total 2.8% drop in the first half of 2025 with equities driving any underlying increases versus waning consumer expectations, weak new orders and a third consecutive month of rising unemployment.

Next week- FOMC meeting, the busiest week of the year for corporate earnings, the Case-Schiller Housing Index and the government jobs report.