10 Things You Need to Know: October 3, 2023
Key data releases this week include: ISM Manufacturing (Mon), JOLTS Jobs Openings (Tue), factory orders (Wed), ISM Services (Wed), consumer credit (Fri), and nonfarm payrolls (Fri).
Haver
September 26, 2023
U.S. house prices rose 0.8% m/m in July after rises of 0.4% in June, according to the Federal Housing Finance Agency (FHFA) House Price Index. The July reading was the eighth consecutive monthly rise to the highest index level on record (409.48). The year-on-year rate of increase accelerated to 4.6% in July from 3.2% in June.
Haver
September 28 ,2023
The Pending Home Sales Index, a forward-looking measure of home sales based on contract signings, fell 7.1% m/m (-18.7% y/y) to 71.8 in August after rises of 0.5% in July (+0.9% initially) and 0.4% in June (unrevised), according to the National Association of Realtors (NAR). The August m/m fall was the first in three months and the deepest since September, with the PHSI at the lowest level since April 2020 (also 71.8). The year-on-year rate of decline deepened to -18.7% in August.
Haver
September 29, 2023
Personal consumption expenditures (PCE) increased 0.4% during August (5.8% y/y) after rising 0.9% in July. A 0.5% rise had been expected in the Action Economics Forecast Survey. Personal income 0.4% in0.4% in August (4.8% y/y) after increasing an unrevised 0.2% in July. A 0.5% rise had been expected. The PCE chain price index rose 0.4% (3.5% y/y) last month, the strongest increase since January. The index excluding food & energy edged 0.1% (3.9% y/y) rose.
Bloomberg
September 29, 2023
Consumers expect prices will climb at an annual rate of 3.2% over the next year, down from 3.5% in August, according to the final September reading from the University of Michigan. They see costs rising 2.8% over the next five to 10 years, the lowest in a year, data Friday showed. Even so, the sentiment index fell to 68.1 from 69.5 in August.
Capital Economics
September 28, 2023
Aggregate EM GDP held up better than we had expected over the first half of the year, but we think that a phase of softer growth lies in store over the coming quarters. With inflation set to fall further, the nascent EM monetary easing cycle is likely to broaden out. Economic vulnerabilities in many of the large EMs have eased significantly in the past year, reducing downside risks to currencies, and giving policymakers more room to lower interest rates.
Barron’s
October 2, 2023
Only 7.2 million or 6% of the U.S. private workforce is unionized, down from nearly 17% four decades ago.
Barron’s
October 2, 2023
The third-quarter earnings season begins on Oct. 13. Analysts expect to see a modest 2% year-over-year increase in S&P 500 earnings per share—but that’s after three straight quarters of negative or no growth. Not-bad results would help keep 2024 expectations for 12% earnings growth aloft.
Capital Economics
September 29, 2023
We expect GDP growth to slow from 2.1% this year to only 0.8% in 2024, with the economy still likely to experience a near recession around the end of this year. Core inflation will continue to fall back to the 2% target by mid-2024, with much of the coming disinflation already baked in. Under those circumstances, we suspect the Fed will eventually abandon its higher for longer rhetoric and cut interest rates by a cumulative 200bp next year.
CNBC
September 29. 2023
Technical analyst Katie Stockton, CMT, has moved to calm investor worries over stock market health, describing it as simply a correction within a cyclical uptrend and contending that concerns would only need to be raised in earnest if the S&P 500 had fallen below support at 4,200. Stockton comments: “I think the bigger question beyond a potential relief rally is how sustainable it is, and will it get us back above that long-term resistance, which is about 4,600.”