Stocks continue to rise. Trump’s promise of tax reform, less regulation and infrastructure improvements seem to be the catalyst for rising stock prices. Nationally, the job market is tight, wages have risen slightly and it appears inflationary pressures are rising to a level where the federal reserve may soon act to raise over-night lending rates again. Right now, it’s risk on to owning equities albeit measured by individual risk preference and time limitations.

So, what’s trending in the fixed income, bond market space?

The Wall Street Journal reported two weeks ago there is more than $1.4 trillion in outstanding student loan debt based on students who were to begin repaying these loans in 2006 & 2007. A staggering $560 billion or 40% of all borrowers, haven’t even paid a single dollar toward these loans in the last 7 years. The Journal obtained this information from the Obama administration’s College Scorecard. These are loans that have been packaged up and sold to investors in the form of bonds as securitized debt. Yikes.

The Financial Times reported last week the automobile loan market stands at roughly $1.1 trillion. Currently, more than 1 million consumer auto loans are at least 2 months behind on payments, the highest since 2009. This statistic includes everyone with a car loan, not just sub-prime loans. Wow.

Bloomberg reported last week that Japan and China sold U.S. Treasury’s last year at a pace not seen in years. Granted, on a percentage basis of what they own it’s a small amount. But could the prospect of unpaid debt, higher inflation and rising interest rates in the U.S. be driving the largest holders of U.S. public debt to look elsewhere to invest some of their cash? Hmmm.

For now, unmanageable U.S. debt or an unexpected world conflict is the main threat to global financial markets. So while the bulls continue their run, stay nimble, tactical and be sure you know what you own.

These are the opinions of Randy L Miles Sr and not necessarily the views of Cambridge are for informational purposes only and not to be construed or acted upon as personal investment advice