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Nvidia’s exceptional quarter has further fueled the AI rally and captured some headlines. However, it’s crucial to examine the other underlying factors at play.
For instance, the first chart below shows just how much household interest payments have increased recently, reflecting our collecting reliance on debt to fuel spending. As of the end of 2023, these interest payments had surged to an unprecedented high of $564 billion.
And this figure represents interest alone; not principal payments.
Additionally, the second chart illustrates a contraction in credit lending, highlighting a downturn in bank credit lending.
Investing is about staying aware and prepared for events that could disrupt markets. That’s why a good risk manager is always aware of the risks. Right now, these diverging forces – Nvidia’s rise vs. the debt picture – have our attention and are something we’re keeping an eye on.
Because at Anchor that’s what we do. We watch, we adjust, we make sure investors know what’s going on.