The U.S. Consumer Is Out of Cash. So Why Are Stocks Still Ripping?

The consumer is broke.

Savings are gone. Credit cards are maxed. Defaults are rising.

But the market?

Today’s Macro Monday isn’t about rates or dot plots.

It’s about the cracks forming at the foundation of the U.S. economy — and why stocks don’t care (yet).

🧾 Let’s look at the tape:

• Credit card balances: Hit $1.3 trillion — all-time high.

• Personal savings rate: Down to 3.6%. That’s 2013-level broke.

• Delinquencies (30+ days): Surging, especially among Gen Z and subprime borrowers.

• Retail sales (real): Stagnant or negative — consumers are spending more to get less.

🧠 So what’s holding the market up?

1. The AI trade is masking everything else.

NVDA, AAPL, MSFT, GOOGL — a handful of mega-caps are dragging the S&P 500 higher.

This is not a broad bull market. It’s a narrow momentum melt-up.

2. Liquidity is quietly flooding back in.

• The Reverse Repo Facility is draining — that’s ~$500B of cash coming back into the system.

• The Treasury General Account isn’t rebuilding fast — leaving more cash sloshing around.

Add it up: The Fed isn’t easing, but the market is.

3. Soft landing is the consensus — and that’s dangerous.

The base case on Wall Street is that the Fed pulled off a miracle:

Inflation is falling, growth is stable, and no one had to bleed.

🔮 What this sets up:

When the liquidity fades, or when earnings guide lower, this divergence has to resolve.

And history says it doesn’t resolve gently.

This is how late-cycle blowoffs form:

• Consumers crack before the market reacts.

• Earnings collapse months after behavior changes.

• Indexes levitate—until they don’t.

👇 The signal:

Keep watching credit.

Watch guidance from consumer-facing stocks.

And don’t confuse a headline rally with a healthy market.

— StocksTrades.AI Newsletter

Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.