10 Things You Need to Know: November 28, 2023
Key data releases this week include: new home sales (Mon), FHFA House Price Index (Tue), consumer confidence (Tue), Q3 GDP revision (Wed), Beige Book (Wed), personal spending and income (Thu), PCE Deflator (Thu), pending home sales (Thu), and ISM Manufacturing Index (Fri).
Bloomberg
November 27, 2023
US sales of new houses fell in October after a downward revision to the prior month as decades-high mortgage rates weighed on demand. Purchases of new single-family homes decreased 5.6% to a 679,000 annualized pace last month, government data showed Monday. The pace missed all estimates in a Bloomberg survey of economists.
Haver
November 20, 2023
The U.S. Leading Economic Index fell 0.8% during October following an unrevised 0.7% September decline and 0.4% August drop, according to The Conference Board. It was the largest decline in six months. A 0.6% weakening had been expected in the Action Economics Forecast Survey. Seven of the ten index components made negative contributions to the overall index in October.
Haver
November 21, 2023
Sales of existing homes declined 4.1% (-14.6% y/y) during October to 3.79 million (SAAR) after falling 2.2% to 3.95 million in September. Sales stood at the lowest level since August 2010 after the most recent peak of 6.56 million in January 2021. The Action Economics Forecast Survey expected October sales of 3.90 million units.
Capital Economics
November 24, 2023
Euro-zone governments have been tightening fiscal policy this year and will continue doing so in 2024 – all the more so if Germany chooses to make some additional expenditure cuts in response to the constitutional court ruling regarding its off-budget funds. This austerity-lite supports our view that the economy will fall into recession in Q4 and do little more than flatline in the first half of 2024.
Financial Times
November 21, 2023
Chinese regulators are pushing state banks to lend more money to private property developers as Beijing attempts to prop up its floundering real estate sector. Private property developers have been hit hard by China’s property sector crash. The new measures “would boost the short-term market sentiment” said Larry Hu, chief China economist at Macquarie, while adding that commercial banks can only do so much.
Barron’s
November 27, 2023
Dan Niles, founder of the Satori Fund, a tech-focused hedge fund, thinks tech’s rally will extend through year end. One factor, he says, will be “window dressing” and tax-loss selling as portfolio managers spruce up their holdings for year-end disclosure reports. “Everybody wants to show they owned all the winners—the Magnificent Seven—and that they didn’t own the losers,” he says.
Barron’s
November 27, 2023
There’s a 25% chance that the Fed will cut rates by its March 2024 meeting, with greater than 50% odds that rates fall by May, according to the CME FedWatch Tool. That’s right in line with what has happened in the past: The central bank has started lowering rates nine months after its final hike on average, which would put this one at the policy meeting that ends on May 1.
Oxford Economics
November 27, 2023
We expect a material slowdown in the US economy in the next couple of quarters to give way to a modest acceleration in GDP growth in the second half of 2024. In effect, the Fed will pull off a ‘soft-ish’ landing.
Capital Economics
November 24, 2023
We think that the most likely outcome of the OPEC+ meeting is that Russia and Saudi Arabia extend their voluntary cuts into January. If we are right, oil prices will find support at current levels, but are unlikely to make gains.