| Tuesday's Headlines 1. US markets waver on Fed comments 2. Sprint and T-Mobile merger approved 3. What the Fed said 4. U.S. consumer debt tops $14 trillion for the first time Markets Closed
 Markets Today U.S. markets gave up early gains today, but the S&P 500 and the Nasdaq managed to eke out new record highs. The coronavirus, now officially named COVID-19, is still a lingering concern as money managers are now calling it a major market risk. Businesses continue to adjust their tactics and financial projections due to the outbreak. Hilton, for example, announced the closing of 150 of its hotels in China, and American Airlines said it will cancel all flights to China's mainland and Hong Kong until April 1, citing weak demand. (Side note: COVID-19 emerged from bats in China...Yikes! Childhood phobia of mine.)
Fed Chair Jerome Powell delivered testimony to Congress in his semi-annual appearance before the House Financial Services Committee. Powell said the Fed was 'closely monitoring' the coronavirus. He also indicated that the Fed is comfortable with interest rates at current levels, and warned that the low level of rates in the U.S. and around the world could become a problem in the next downturn. "This low interest rate environment may limit the ability of central banks to reduce policy interest rates enough to support the economy during a downturn," he said. Double yikes!
That's about when U.S. markets gave up most of their gains for the session. It was a busy news day, so let's charge ahead. Headlines:
 Sprint and T-Mobile Cleared for Merger T-Mobile's $26 billion acquisition of Sprint was given the green light by a federal judge despite outcry from several states' attorneys general, as well as from smaller competitors. T-Mobile said the companies will try to finalize the deal by April 1.
Attorneys general from thirteen states and the District of Columbia sued to block the merger, saying it would reduce competition in the wireless telecommunications market and harm consumers with higher prices. Their arguments were rejected in a ruling issued by District Judge Victor Marrero of U.S. District Court for the Southern District of New York.
T-Mobile promised phone bills will remain the same for the next three years. The two providers operate on different networks, which can be a hassle for customers looking to switch plans. T-Mobile is on a GSM network while Sprint uses CDMA — which means Sprint consumers with older phones might need to buy a new one.
This is Really About 5G, Right? Right! The FCC said it wants to make sure rural Americans are well served, confirming on Tuesday that T-Mobile and Sprint have committed to delivering high-speed 5G internet to 97 percent of the country within three years of closing.
With this merger, there are now just three major wireless carriers in the U.S.  One Nation Under Debt Hey big spenders, total U.S. household debt rose by $601 billion year-over-year in Q4 2019, or 4.4%, surpassing $14 trillion for the first time, according to the New York Fed's quarterly household credit and debt report. That's $1.5 trillion above the previous peak reached in Q3 2008. Overall household debt is now 26.8% higher than lows it hit in the Q2 2013. Read the full story here.
That's 22 consecutive quarters of increased borrowing as more households took out loans to buy homes, refinance existing mortgages, buy cars, or pay for college. Among those categories, home buying and refinancing showed the biggest spikes as the rate for a 30-year mortgage has fallen by about 100 basis points over the past year. "Mortgage originations, including refinances, increased significantly in the final quarter of 2019," Wilbert Van Der Klaauw, vice president at the New York Fed, said in a statement. The NY Fed also noted the increase in delinquencies among credit card borrowers since 2016.
Money has been cheap for borrowers here in the U.S., and the job market is strong. Wages are rising, albeit slowly. Still, consumers racking up excessive debt when the economy is fairly stable is a troubling sign. Just as Fed Chair Powell warned of central banks being out of ammunition when the next downturn comes, consumers ought to heed the same warning, pay down debt where they can, and squirrel away some nuts for the next economic winter. 
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(chart courtesy YCHARTS)  Shares of telecom firms Sprint and T-Mobile both jumped after their merger was approved, for more, see above. Telecom equipment firm CommScope Holding also rose today. Brighthouse Financial rose after an earnings beat, as did health insurance provider Molina Healthcare.  Apparel maker Under Armour fell dramatically today after it announced both disappointing earnings for last year and disappointing sales guidance for this year. Moderna, a company developing a coronavirus vaccine, lost much of yesterday's gains. Word of the Day Herfindahl-Hirschman Index (HHI) The Herfindahl-Hirschman Index (HHI) is a common measure of market concentration and is used to determine market competitiveness, often pre- and post-M&A transactions.  Today in History February 11, 1847 Today in 1847 inventor and businessman, Thomas Edison, was born in Milan, Ohio. After working as a telegraph operator he eventually patented his first invention in 1869, an electric vote recorder. Contemporary politicians were uninterested. He would later work to patent several improvements to the telegraph throughout the 1870's, including inventing telegraphs which could send two messages simultaneously in both directions. Among his most famous inventions were the first practical incandescent electric lightbulb, as well as the phonograph, which he invented in 1877. Source: https://www.loc.gov/collections/edison-company-motion-pictures-and-sound-recordings/articles-and-essays/biography/life-of-thomas-alva-edison/
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Tuesday, February 11, 2020
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