Wall Street is starting to worry about the auto loan market.
Fitch, Moody’s, Morgan Stanley, Mizuho and Evercore ISI have all published research on the market in the past few days, and there’s a recurring theme: It’s not looking good. There could be wide-ranging consequences, with automakers, the economy, consumers and one corner of the bond market all potentially taking a hit.
The increased interest in the auto loan market seems to be based on commentary from Ally Financial, weak guidance from Ford, and what Evercore ISI called “a splurge in incentive spending.” Here’s what you need to know:
To the charts:
Fitch: “Deteriorating credit performance will be more acute in the subprime segment.”
The 60+ day delinquency rate for subprime is at the highest in at least seven years, according to Fitch.
Previously, Steven Ricchiuto, Mizuho’s chief US economist, highlighted a jump in losses on subprime…
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