Truist notes consumer finance coverage ‘flirting with bear market territory’

Truist notes that the firm’s consumer finance coverage is “flirting with bear market territory,” with the median of the firm’s card issuer and auto finance coverage now down (19%) from the January 6 peak. What started as a 10% rate cap fear has “now turned to fighting ghosts as investors try to disprove a hypothesis that AI will drive mass unemployment and off network spend,” which “all makes for tough sledding,” the analyst tells investors. The firm, which adds that it ran a buy side survey asking where investors would step in long and defend in financials, reports that the top five answers were Visa (V), Capital One (COF), Citi (C), Schwab (SCHW) and Mastercard (MA). The firm has Buy ratings on all five of those stocks along with Buy ratings on Ally Financial (ALLY), American Express (AXP) and Robinhood (HOOD).