As the Recovery Heats Up, 1 Number Is a Warning Sign for These 3 Stocks

With the unemployment rate at 6%, the lowest level since before the pandemic, and the Institute for Supply Management's manufacturing gauge hitting its highest reading since 1983, the economy is definitely gaining strength. Nevertheless, underneath the strong economic numbers are a few data points that could spell trouble for one group.

By the end of the summer in 2007, long before Americans knew the great financial crisis was beginning, default rates for subprime mortgages spiked. Lenders may have seen the writing on the wall, because the total volume of subprime loans also dropped.

A similar story is currently playing out in auto lending. While the industry doesn't influence the economy nearly as much as housing, the numbers should get the attention of investors in Capital One Financial (NYSE: COF), Ally Financial (NYSE: ALLY), and Credit Acceptance Corp. (NASDAQ: CACC). If the yellow flag turns red, it could dent the stocks and stall any share price appreciation over the next few years.