The stock market has seen some recovery as inflation continues to cool, the job market remains resilient, and consumers continue to spend. Much of the sentiment for the market going into 2024 seems to be bullish, but rising credit card debt and resuming student loans repayments are worrying some investors.

Charles Schwab Chief Fixed Income Strategist Kathy Jones joins Yahoo Finance to discuss her thoughts on the performance of the market, how it relates to rising credit delinquencies, and what upcoming PCE data could mean for the market going forward.

We are starting to see some catch-up amongst smaller businesses that are financing at very high interest rates right now, 8%, 10%, etc., and have to roll over those loans at a pretty consistent... short-term basis," Jones explains. "One thing about the consumer we have to keep in mind is, as long as people have jobs they will continue to spend, it's just their ability to spend a certain amount at a certain pace that's probably going to slow down. "

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

RACHELLE AKUFFO: Certainly the market's jumping ahead, expecting those rate cuts in the first half of the year. But one of the issues-- one of the contributing factors that you're looking at with this drawdown in bond yields is that slowdown in growth. And I know we've talked a lot about credit card debt. But we're also seeing that become delinquencies. And we're seeing that across all loans according to the New York fed, except for except for student loans and home equity lines of credit. What does that lag effect when it comes to the consumer? When is that going to-- when is the rubber going to hit the road there?

KATHY JONES: Well, I think it's starting to. As you pointed out, delinquencies are rising on credit cards. Auto loans, lots of trouble in the auto, especially the subprime auto area. People are not able to get financing. We're starting to see some catch up among smaller businesses that are financing at very high rates right now, you know, 8%, 10%, et cetera, and have to roll over those loans at a pretty consistent basis on a short term basis. So we're starting to see it. But it's going to take some time.

And I think one thing about the consumer we have to keep in mind is as long as people have jobs, they will continue to spend. It's just their ability to spend a certain amount at a certain pace that's probably going to slow down. And then when we start to see more job losses or certainly less hiring, that's probably when we see the consumer really pull back.