10 Things You Need To Know: October 4, 2022
Key data releases this week include: ISM Manufacturing Index (Mon), factory orders (Tue), JOLTS Job Openings (Tue), ISM Services Index (Wed), and nonfarm payrolls (Fri).
Haver
September 27, 2022
The Federal Housing Finance Agency (FHFA) House Price Index fell 0.6% m/m (+13.9% y/y) in July following a tepid 0.1% monthly gain in June. This was the first monthly decline since May 2020 and only the second since January 2017. Prior to the June and July readings, house prices had risen 1% or more in 23 of the previous 24 months.
Haver
September 27, 2022
New single-family home sales during August rose 28.8% (-0.1% y/y) to 685,000 (AR) after falling 8.6% to 532,000 in July, revised from 511,000. The Action Economics Forecast Survey expected 500,000 sales in August. The median price of a new home declined 6.3% during August (+8.0% y/y) to $436,800 following an 8.9% July gain.
Haver
September 28, 2022
The Pending Home Sales Index produced by the National Association of Realtors fell 2.0% (-24.2% y/y) to 88.4 in August following a 0.6% easing in July. The August decline was the ninth in ten months. Pending home sales have fallen 30.9% since the August 2020 high.
Haver
September 29, 2022
Real GDP growth during Q2’22 was unrevised at -0.6% (+1.8% y/y) after declining an unrevised 1.6% in Q1. The latest figure matched expectations in the Action Economics Forecast Survey. GDP increased at a 2.1% annual rate from 2016 to 2021, up 0.2% from the earlier estimate.
Haver
September 30, 2022
The consumer exhibited caution with spending last month. The August increase in personal consumption expenditures of 0.4% (8.2% y/y) followed a 0.2% July dip and a 1.2% June surge. A 0.2% increase had been expected in the Action Economics Forecast Survey. Personal income rose an expected 0.3% (3.9% y/y) during August, the same as in July.
Barron’s
October 3, 2022
“I don’t think the market should be screaming recession because companies are in good shape. Their cash-flow numbers are good; they’ve built up a tremendous amount of cash and pushed out their debt maturities. I don’t think we’re going into a deep recession. I’m pretty sanguine about the U.S.” – Rick Rieder, BlackRock CIO global fixed income.
Barron’s
October 3, 2022
The common complaint among bond pros is the poor liquidity in what’s supposed to be the world’s deepest market. Trading anything but the most recent issue of a particular maturity has become difficult. To counter that, the BofA analysts think, the Fed could revive “Operation Twist,” buying longer-dated bonds, offset by sales of shorter maturities, while continuing QT. While such a twist isn’t their base case, it’s a growing risk, they add.
Reuters, National Public Radio
September 29, 2022
Federal Reserve policymakers in their public statements are saying the central bank is doing the right thing by pressing ahead with further interest rate increases in an effort to curb inflation. San Francisco Fed President Mary Daly said she is “quite comfortable” with rates in the 4% to 4.5% range this year and 4.5% to 5% in 2023, while Loretta Mester, president of the Cleveland Fed, said she is open to an even more aggressive approach to pushing up interest rates.
Reuters
September 28, 2022
The majority of economists surveyed by Reuters expect the Federal Reserve to implement another 75-basis-point interest-rate hike in November, followed by a 50-basis-point hike in December. This would bring the Fed funds rate to 4.25% to 4.5% by year-end, versus the 3.5% to 3.75% predicted two weeks ago.