- Fed officials are starting to discuss slowing their rate hikes.
- Yields declined, and the Treasury curve steepened in response.
- The terminal rate came off the 5% level.
- Next, we have some updates on inflation.
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- The Fed’s index of inflation expectations (see “further reading” below):
- BofA’s CPI forecast:
Source: BofA Global Research
- The S&P Global (Markit) PMI report showed US business activity holding in contraction territory this month.
Source: Bloomberg Read full article
- The manufacturing PMI dipped below 50, …
- with demand weakness worsening.
- Factories’ future output index declined sharply.
- The Conference Board’s consumer confidence index declined this month, coming in below market consensus.
- Home prices declined sharply in August.
- But it will take more pain to correct the housing-wages imbalance.
- Below are home price declines since the peak by metro area.
- Mortgage applications are down 42% from a year ago.
- But mortgage applications point to significant deterioration in sales in the near future.
- New home inventories remain at multi-year highs, …
- The number of units for sale that haven’t been started hit a record high.
- Pending home sales are crashing (2 charts), …
Source: Redfin
Market Data
- Bloomberg’s commodity index is at support.
- The S&P 500 is holding support at the 200-day moving average.
- 2023 earnings projections are still too high. Market fundamentals remain weak.
- The US dollar strength is taking a toll on corporate sales.
- Analysts continue to downgrade the 2023 earnings estimates.
- The US dollar index (DXY) is testing support at the 50-day moving average.
- Nearly half of all tech stocks have fallen more than 30% this year.
Quote of the Week
“My bed is a magical place where I suddenly remember everything I forgot to do.” – Anonymous
Picture of the Week
Price changes since 2020:
All content is the opinion of Brian J. Decker
