Rising card delinquency rates, particularly among lower income consumers, are one of several pieces of data that have led some to take a negative view of the US consumer. But Mihir suggests delinquency rates have started to decline recently and discusses why that's been the case. Ultimately, employment is a key driver for consumer credit and we'd be more concerned if the outlook for jobs deteriorated more rapidly. "Buy Now/Pay Later" or BNPL has enjoyed rapid growth in recent years, particularly among younger consumers, but a combination of higher rates and a weaker consumer has stalled growth. Mihir believes that BNPL is most challenging for the traditional private label card issuer market (e.g. department store cards), and will continue to gain market share. Mihir also discusses the mortgage insurance sector which has less credit risk than in the past given today's higher underwriting standards and because of the equity that many homeowners now have, owing to home price appreciation.

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The eventual impact of higher rates on credit, the rise of private capital, slow loan growth and forthcoming tighter regulations have all weighed on bank multiples to varying degrees. But these attractive multiples relative to history, combined with a view that rates probably have peaked, keep Ebrahim Poonawala constructive on the bank group. This is particularly true for money center banks and large regionals, which are less impacted by regulatory changes coming in the wake of last year's bank failures. Ultimately, Ebrahim believes that the value of a bank comes down to the stickiness of its customer deposit base and the services it provides its customers. And certainly, there are a number of banks across the size spectrum that have attractive franchises from that standpoint. And the possibility of M&A, especially as there remain 4,000+ banks in the US, is also a key driver and one that will have disproportionate impact on small and mid-sized banks. The trajectory of Fed policy is a key consideration for the group and if the market were to move to price in a hike, that's a risk.

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"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

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Over the last two decades, copper demand was inexorably linked to China. At times, China accounted for 110% of global copper demand growth. Now, countries are rebuilding their supply chains at home, building data centers and decarbonizing. While the source of copper demand has changed, demand growth remains compelling and strategist Michael Widmer is bullish on the metal while analyst Lawson Winder is constructive on exposed stocks, even as EV sales slow. On the other side is copper supply, which remains tight given the lead times necessary for new mine capacity. Uranium demand is driven by some of the same forces, as the possibility of new plants in the West rise. The uranium bear case is that 40% of the world's uranium is produced in Kazakhstan which could impact price.

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"Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities.

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