10 Things You Need To Know: November 1, 2022
Key data releases this week include: JOLTS Jobs Openings (Tue), ISM Manufacturing (Tue), FOMC rate decision (Wed), factory orders (Thu), ISM Services (Thu), and nonfarm payrolls (Fri).
Haver
October 25, 2022
U.S. house prices fell 0.7% m/m in August after an unrevised 0.6% decline in July and a 0.1% uptick in June, according to the Federal Housing Finance Agency (FHFA) House Price Index. The August reading was the second monthly fall since May 2020’s -0.3%. The year-on-year rate of increase decelerated to 11.9% in August, the lowest since December 2020, from 13.9% in July.
Haver
October 27, 2022
Real GDP grew at an annual rate of 2.6% (1.8% y/y) during Q3’22, following unrevised declines of 0.6% and 1.6% in the prior two quarters. The latest figure compared to expectations for a 2.2% rise in the Action Economics Forecast Survey. Improvement in the foreign trade deficit added 2.8 percentage points to growth last quarter.
Haver
October 28, 2022
The Pending Home Sales Index produced by the National Association of Realtors fell 10.2% (-31.0% y/y) to 79.5 in September following a 1.9% August decline. The September decline was the tenth decline in eleven months. Pending home sales have fallen 37.9% since the August 2020 high.
Capital Economics
October 31, 2022
The increase in euro-zone GDP in Q3 does not alter our view that the euro-zone is on the cusp of a recession. But with inflation having jumped to well over 10%, the ECB will prioritize price stability and press on with rate hikes regardless.
Bloomberg
October 27, 2022
Chinese President Xi Jinping said his nation is willing to work with the US to find ways to cooperate, comments that come before a potential meeting with President Joe Biden at a Group of 20 summit next month. Better communication between the two nations would bolster global peace and development, Xi said in a letter to the National Committee on US-China Relations.
Barron’s
October 31, 2022
A divided government is the most likely outcome in November, with most polls suggesting that Republicans will regain control of the House of Representatives. Republicans also have a slimmer but still serious chance of winning control of the Senate. Should polls prove correct, a return to split government probably would come as a welcome change to financial markets, given that any significant legislation and fiscal spending would almost certainly be off the table.
Barron’s
October 31, 2022
The average U.S. 30-year mortgage rate hit 7.08% on Thursday, the highest level in about 20 years. Eric Finnigan of John Burns Real Estate Consulting says the move in mortgage rates this year has boxed out 24 million households from a $400,000 mortgage, meaning that the pool of potential buyers has shrunk by 47% since December.
Bloomberg
October 31, 2022
Former Treasury Secretary Lawrence Summers says, “I do not think that the dovish pivot in some of the rhetoric coming out of the Fed has yet been warranted by the economic statistics.” He said he hopes the Fed “will be clear that it is staying the course on doing what’s necessary.”
Bloomberg, NYT
October 26, 2022
The yield on the 10-year Treasury note dropped below the yield on the 3-month note Wednesday, a rare event seen as a signal of an impending recession. Numerous inversions of long- and short-term yields have occurred lately, but inversion of this particular pair historically appears late in a Federal Reserve tightening cycle and immediately before a recession.