In August the Treasury Borrowing Advisory Committee (TBAC) told the market they were raising the net new money issuance recommendation for Q32023 from the initial guess of $733B to over $1T. They also announced a recommendation of $852B of net new money for Q42023. That spooked the bond market and 10-year yields jumped from 4% at the beginning of August [...]
The most likely candidate for what moved markets today is the GDPNow update. The forecast for growth in Q4 dropped from an initial forecast of 2.3% to 1.2%. Of note, this is also a much slower growth than we saw in Q3. The bond market certainly reacted as yields continued to drop. The stock market appears to be reacting to [...]
The Fed left the policy rate unchanged at a range of 5.25-5.5%. Thinking about future meetings, Powell said that they he believes policy is restrictive and is working to bring down economic activity and inflation. But, he also said that they do not know whether the current policy rate is sufficiently tight enough to bring down inflation to 2% over [...]
A slight zig in the right direction versus September for both reports. ADP reported an addition of 113,000 jobs in October up from 89,000 in September. Even better, this was a steady increase throughout the month and not an isolated week. For the Jolts report, this number is a month stale. But it's a good one to look at because [...]
Total construction spending is growing at 8.7% and that is an increase from 7.6% growth last month. Like we saw in the housing data, residential construction is improving. It now stands at -2.1% from a year ago, an improvement from the -4.4% yoy growth we saw last month. Non-residential spending is where we see an absolute boom. The reshoring story [...]
From the press release: The Conference Board's Consumer Confidence Survey "US Consumer Confidence fell again in October." "Consumers remain pessimistic about the future--even as they continued to spend." "The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—declined to 143.1 (1985=100) from 146.2. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell slightly to [...]
Similar to other regional surveys, down .1 from September and near the average for the year. Soft conditions. We need directional confirmation. Chicago Business Barometer Disclaimer: This information is presented for informational purposes only and does not constitute an offer to sell, or the solicitation of an offer to buy any investment products. None of the information herein constitutes [...]
Housing prices were coming down this time last year. But, despite mortgage rates at their highest levels since 2000, housing prices are again appreciating and reached an all-time high in August. Summary Conclusions: Housing Affordability lowest since the early 80's, surpassing 2006. Prices at an all-time high and rising. Housing sales volume approaching the lowest of the last 25 years. [...]
The current business environment dropped to it's lowest level of 2023, -18.2, meaning 18.2% more of those surveyed think the economy slowed since last period. This mirrors economic readings from the earlier regional surveys. Yes, slowing activity, but Q3 was very strong, so not completely unexpected. If the trend continues after this softening, we will be at levels which cause [...]
Just confirming, wage growth is running around 4.5%. This is still elevated relative to history and not consistent with an inflation target of 2%. But the growth is coming down. Government wages actually had an uptick in the 3rd qtr. I would not expect that to continue. Disclaimer: This information is presented for informational purposes only and does not [...]
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