I gave you a brand new Ford, you said 'I want a Cadillac.'
I bought you a ten dollar dinner, you said 'Thanks for the snack.'
I let you live in my penthouse, you said it was just a shack.
- Performed by B.B. King
SWBC's LenderHub blog is a one-stop resource for lenders.
Risk markets last week could best be described as “moody.” Both the S&P and NASDAQ chopped around a fair amount, with both indices ending up in the red for the week. Big Tech stocks continued their slide from the August Olympian heights. However, we saw the IPO for Snowflake, a leading cloud software company, end up with a valuation of $70 billion by the end of first day trading. However, in corporate bond country, investment grade bonds held pretty firm and high yield bonds closed at their tightest level since the pandemic era began.Read More
In my previous blog post, I discussed how COVID-19 is impacting the auto lending industry. While industry analysts were not expecting 2020 to be a record year, with the widespread outbreak of COVID-19 in March, vehicle sales effectively dropped off a cliff, reaching their worst level, based on a seasonally adjusted rate since March 2010, during the Great Recession. Today, I want to provide some specific strategies your financial institution can deploy in order to supplement auto loan originations and increase loan volume.Read More
Equities had their second tough week in a row as some of the biggest winners of the “COVID Rally” have given up a portion of their gargantuan gains. The pull back in the big tech stocks continued this week. As an example, Apple is now only up 78% from mid-March. The horror!Read More
“Just imagine that a bond is a slice of cake, and you didn’t bake the cake, but every time you hand somebody a slice of the cake a tiny little bit comes off, like a little crumb, and you can keep that. If you pass around enough slices of cake, then pretty soon you have enough crumbs to make a gigantic cake…golden cake. And Pierce and Pierce collect millions of marvelous,” she shrugged, “golden crumbs.” –Judy McCoy, Bonfire of the VanitiesRead More
Last week was dominated by the “Big Tech Gets Theirs” story. The tech-heavy NASDAQ declined over 3% for the week, including a 5% rout on Thursday. The index is still up 65% from the COVID-inspired low set in March. Why? The story that has dominated the headlines was that the Japanese venture capital group Softbank had a tremendous upside option bet on the biggest of big tech, paying up to $4 billion in option premium, and now the trade is starting to turn against them.Read More
Another week, another great week for stocks and corporate bonds. Sure, there was a noticeable amount of hand-wringing from “the experts” that the rally in equities is getting narrower and narrower, and the prospects for many major economic sectors such as banks, airlines, energy, retail, and leisure (to name a few) were pretty grim. That didn’t stop another round of healthy gains for major indices.Read More
The mighty U.S. Dollar, the coin of the realm (where the “realm” is the entire world), appears shaky for the first time in a long time. Replacements like the Euro, Yen, or crypto are periodically offered up (forget the Chinese Yuan, as it is not even a freely-floating, deliverable currency). At the end of the day, just about anything vital and strategic that a nation needs trades in U.S. Dollars. The USD, as measured by The Federal Reserve Trade Weighted Nominal Broad Dollar Index, has swooned 7.2% since March 23rd of this year. During that same time, gold has hit new all-time highs and has increased 25%.Read More
Another week and another high for stocks. The S&P 500 ground higher to hit an all-time high by week’s end, while the NASDAQ used more of an aerial attack to set its own all-time high on Friday. Corporate debt continues to tighten. Leveraged loans are still a problem, but instead of being radioactive—as they were in March—now their problem is that there are not enough of them for CLO demand.Read More
Last week was what a typical slow August trading week once looked like, at least for stocks. COVID-19 continued to dominate the news as new cases slowed a bit in the Southwest and California, but picked up speed in the Midwest. The biggest battle now comes from the reopening of schools across the country. Right now, the outlook isn’t good for face-to-face reopening, which is a huge economic problem, as well as a social one.Read More