10 Things You Need to Know: October 24, 2023
Key data releases this week include: new home sales (Wed), Q3 GDP (Thu), durable goods orders (Thu), pending home sales (Thu), personal income and spending (Fri), PCE Deflator (Fri), and consumer sentiment (Fri).
Haver
October 17, 2023
Retail sales increased 0.7% (3.8% y/y) during September following a 0.8% August rise, revised from 0.6%. July sales rose 0.6%, revised from 0.5%. A 0.2% increase had been expected in the Action Economics Forecast Survey. Sales in the retail group, which excludes autos, building materials, gasoline & restaurants, rose 0.6% (3.8% y/y) following a 0.2% August rise, revised from 0.1%.
Haver
October 19, 2023
Sales of existing homes declined 2.0% during September (-15.4% y/y) to 3.96 million (SAAR) after falling 0.7% to an unrevised 4.04 million in August. Sales peaked at 6.56 million in January 2021. They remained higher than their low of 4.00 million earlier this year. The Action Economics Forecast Survey expected September sales of 3.80 million units.
Haver
October 19, 2023
The U.S. Leading Economic Index (LEI) fell 0.7% m/m in September after drops of 0.5% in August and 0.3% in July. A 0.4% m/m September decline had been expected in the Action Economics Forecast Survey. The September LEI at 104.6 was the lowest level since June 2020 and down from its record high of 117.8 in December 2021. The year-on-year rate of decline was at -7.8% in September, more severe than -7.7% in August and -1.6% in September 2022.
Financial Times
October 16, 2023
The euro will decline to parity with the US dollar by the end of this year as war in the Middle East drives up European energy prices and borrowing costs, JPMorgan strategists say. Meera Chandan, JPMorgan’s co-head of global FX strategy research, wrote that the euro is “still not incorporating a discount for the myriad of uncertainties the currency faces,” citing “tighter financial conditions and potential geopolitical spillover risks, all of which come amid stagnant growth.”
Bloomberg
October 20, 2023
India is rejecting pressure from Russian oil suppliers to pay for crude imports in the Chinese currency as tensions between New Delhi and Beijing continue to simmer. Some Russian oil suppliers are demanding payment in yuan, according to a senior Indian official directly involved in the negotiations and another senior person at a state-owned oil refiner.
Barron’s
October 23, 2023
At least some explanation for the economy’s resilience lies with the wealth of American households, which the Fed reported this past week had increased by some $43.4 trillion since the start of 2020, or roughly 30%. Never before has the U.S. created so much wealth in a short period, and what makes the increase even more difficult to believe is that it occurred during the worst healthcare crisis in 100 years and the sharpest plunge in economic activity on record.
Barron’s
October 23, 2023
The return on residential housing is below the 10-year Treasury yield. That’s based on the “cap rate,” or the return to an investor who buys a house to rent out. So, who needs the hassle of being a landlord if you can earn more on a government bond?
Barron’s
October 23, 2023
By the end of September, 516 U.S. companies had declared bankruptcy, according to S&P Global, twice the 263 insolvencies in the first nine months of 2022 and just shy of 518 in the first nine months of 2020, when Covid-19 lockdowns forced many businesses to shutter. Besides 2020, this year’s bankruptcy toll has been the worst since 2010.
Bloomberg
October 20, 2023
Federal Reserve Chair Jerome Powell suggested the US central bank is inclined to hold interest rates steady again at its next meeting while leaving open the possibility of a future hike if policymakers see further signs of resilient economic growth. “Given the uncertainties and risks, and how far we have come, the committee is proceeding carefully,” Powell said.