10 Things You Need To Know: November 22, 2022
Key data releases this week include: durable goods orders (Wed), consumer sentiment (Wed), new home sales (Wed), and FOMC meeting minutes (Wed).
Haver
November 16, 2022
The consumer appears to be getting a jump on the holidays as the job market remains firm. Total retail sales increased 1.3% (8.3% y/y) during October after holding steady in September, which was unrevised. A 1.0% increase was expected in the Action Economics Forecast Survey. Sales in the retail control group, which excludes autos, gas stations, building materials & food services, rose 0.7% last month (6.5% y/y) after a 0.6% gain in September.
Haver
November 18, 2022
Sales of existing homes declined 5.9% during October (-28.4% y/y) to 4.43 million units (SAAR) from an unrevised 4.71 million in September. Sales have fallen for nine consecutive months and were down 31.7% during that period. The Action Economics Forecast Survey expected October sales of 4.35 million units.
Haver
November 18, 2022
The Conference Board’s Composite Leading Economic Indicators Index fell 0.8% (-2.7% y/y) during October after a 0.5% September decline, revised from -0.4%. The Action Economics Forecast Survey expected a 0.4% decline in the index for October. Six of the Leading Index’s ten components made negative contributions to the index change in October.
Reuters, The Associated Press, The Wall Street Journal
November 17, 2022
UK Chancellor Jeremy Hunt announced a series of tax increases and spending reductions aimed at shoring up the country’s public finances, a sharp reversal from the prior government’s “mini-budget” proposal in September that sparked global market turmoil.
Barron’s
November 14, 2022
The real problem is that when inflation crosses the 8% threshold, it becomes more intransigent and requires more restrictive monetary policy for a longer period. Given that U.S. inflation has run above 6% for the past year and over 8% for the seven months through September (before dipping to 7.8% in October), history indicates that the median time it will take before inflation eases below 3% is 10 years. That’s not a typo.
Barron’s
November 21, 2022
Today’s shoppers have a rather different balance sheet than last year. Existing savings are still strong, with U.S. households having burned through only about a quarter of the $2.3 trillion they socked away during the pandemic, according to an economic analysis from the Federal Reserve. Yet the rate of new personal savings has nosedived, going from a high of 33.8% in April 2020 to 3.1% in September, its lowest point since 2008, according to data from the Bureau of Economic Analysis.
Barron’s
November 21, 2022
The difference between the three-month and 10-year Treasuries widened to more than half a percentage point this past week. That has happened just six times since 1970, the last time in 2007, says Bespoke Investment Group. The economy entered recession five to 14 months later on those occasions.
Financial Times
November 15, 2022
Central banks are signaling potential plans to ease their monetary tightening efforts as the prospect of a major downturn becomes more imminent and inflation shows signs of cooling, economists say. The US Federal Reserve, Bank of England and European Central Bank have all recently indicated that “we’re coming towards a period of slower tightening, mirroring what we’ve seen from Australia, Canada and Norway,” said HSBC economist James Pomeroy.
Bloomberg
November 11, 2022
Analysts have further lowered their expectations for blue-chip earnings in the fourth quarter, bringing aggregate projections into negative territory and potentially pouring cold water on the stock market rally sparked by last week’s positive inflation data. Analysts now forecast earnings of S&P 500 companies to reflect a 0.39% year-over-year decline in Q4.