• The U. Michigan Consumer Sentiment Index softened this month (coming in below forecasts), with both the current conditions and expectations indices registering declines.

 

 

  • Consumers increasingly expect a weaker job market.

 

 

  • Residential investment will remain depressed next year, according to a forecast from Morgan Stanley.

 

 

  • Declining mortgage demand points to more weakness in residential construction.
  • The NY Fed’s regional manufacturing index (the first such report for November) was stronger than expected.

 

 

  • But new orders remain lackluster.

 

 

  • The cost index has been moving higher, suggesting that manufacturers still face price pressures.
  • Despite a more upbeat headline figure, forward-looking indicators are crashing.

 

 

  • At the national level, the Oxford Economics leading index points to further weakness in US factory activity (and perhaps the overall economy).

 

 

  • Producer price inflation continues to moderate.
  • Retail sales topped expectations, suggesting that consumers are willing to spend despite the surge in prices.
  • Despite strong retail sales in October, real holiday spending is expected to be down this year for the first time since the GFC.
  • Homebuilder sentiment is crashing.

 

 

  • Container shipping costs are down nearly 80% from a year ago.

 

 

Market Data

 

  • BofA’s private clients flocked into bonds recently.

 

 

  • Many analysts expect an earnings recession ahead, …

 

Source: Morgan Stanley Research

 

… posing downside risks to the market. Here is a forecast from Morgan Stanley.

 

Source: Morgan Stanley Research

 

  • Fund managers remain underweight tech.

 

 

  • The stock market is signaling lower Treasury yields ahead.

 

 

Quote of the Week

 

“My mother always used to say: The older you get, the better you get, unless you’re a banana.”
—Rose (Betty White), The Golden Girls

 

Picture of the Week

 

 

 

All content is the opinion of Brian J. Decker