QUICK QUILL — Downgrade risks to the capex and consumer outlooks are on QI’s watchlist. Recent evidence suggests cooling in these two cyclical sectors that underpin private demand. From a fundamental perspective, it argues for reduced exposures to cyclicals.
TAKEAWAYS
- Per the NY Fed’s Credit Access Survey, involuntary account closures rose to 8% in June vs. 7% in Q1, remaining at elevated levels since late 2023; voluntary closures have fallen over the same time horizon to June’s 14.5%, suggesting consumers aren’t retiring debts as quickly
- July’s 16.41 million SAAR for unit auto sales is consistent with Q1 2025, and UMich Upper-Income Auto Buying Conditions rising to a five-month high of 62 should keep sales afloat; meanwhile, spending on sports & recreation vehicles and jewelry/watches has faltered
- The aggregate of real consumer spending on travel-related items fell in the first two quarters of 2025, leaving no momentum heading into the second half of the year; meanwhile, taxi & ride share spending has stalled, a red flag for Uber drivers trying to make ends meet