10 Things You Need To Know: November 29, 2022
Key data releases this week include: FHFA House Price Index (Tue), consumer confidence (Tue), 3Q GDP revision (Wed), pending home sales (Wed), JOLTS Jobs Openings (Wed), Beige Book (Wed), personal income and spending (Thu), PCE deflator (Thu), ISM Manufacturing (Thu), and nonfarm payrolls (Fri).
Haver
November 23, 2022
New single-family home sales during October increased 7.5% (-5.8% y/y) to 632,000 (AR) from 588,000 in September. August sales totaled 661,000. Sales have fallen 39.0% from their peak of 1.036 million in August 2020. The Action Economics Forecast Survey expected sales of 575,000 new homes. The median price of a new home increased 8.2% last month (15.4% y/y) to $493, 600.
Reuters, The WSJ
November 22. 2022
The Organization for Economic Cooperation and Development said Tuesday that the global economy might avoid a recession next year, but a severe slowdown is likely and would hit Europe the hardest. The OECD also said that the ECB needs to raise its key interest rate to a range of 4% to 4.25% by the middle of next year, from the current 1.5%, to effectively fight inflation.
Capital Economics
November 28, 2022
The authorities will not allow a protest movement to occupy China’s streets for any length of time. If the protests continue, a crackdown is very likely. They have no good options in the near-term to address protestors’ demands; relaxation of strict COVID control policies would almost certainly lead to a surge in deaths that would destroy the leadership’s claim to have responded effectively to the pandemic.
Dario Perkins, TS Lombard/ Barron’s
November 28, 2022
The next decade will provide a more challenging environment for investors. Without the secular bull market in bonds—which caused all long-duration assets to “rerate”—investors will need to identify the specific macro themes of the 2020s. We see opportunities in commodities, “value” stocks, and real (tangible) assets. Intangibles will be the big losers, especially “growth” stocks.
Bloomberg
November 28, 2022
Expectations are growing that Federal Reserve Chair Jerome Powell will use a speech Wednesday at the Brookings Institution to lay groundwork for a slower pace of interest-rate increases. Other Fed officials have signaled preference for a 50-basis-point increase during the December policy meeting, after four consecutive increases of 75 basis points.
Capital Economics
November 25, 2022
We doubt the recent outperformance of equities vis-à-vis government bonds in the US will persist over the next three to six months, given our view that the economy there is heading for a mild recession in the spring of next year. We do think, however, it will become a regular feature from mid-2023 onwards.
The Wall Street Journal
November 21, 2022
Commodity Trading Advisors, quantitative funds that track market trends, have bought $146 billion of equities over the past month, driven largely by signs of cooling inflation, according to an analysis by Deutsche Bank. This marks the first time CTAs have been overweight equities in 2022, and their biggest stock-buying spree since the beginning of the coronavirus pandemic.
Bloomberg
November 28, 2022
Despite weakening demand for their goods and services, many businesses are looking to retain or even add staff, rather than let them go — hoarding labor that they know they’ll need once the economy starts accelerating again. That would make the coming economic slowdown very different, and in some ways less painful, than the ones the world has gotten used to.
Bloomberg
November 28, 2022
BlockFi Inc. filed for bankruptcy, the latest crypto firm to collapse in the wake of crypto exchange FTX’s rapid downfall. BlockFi said in a statement Monday that it will use the Chapter 11 process to “focus on recovering all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities.” FTX US is listed in the company’s petition as one of its top unsecured creditors, with a $275 million loan.