Trending Concerns & Opportunities
Due out Tuesday: 1) ISM Services Index 52.4% expected versus 51.8% prior. S&P Services PMI 50.8 expected versus 50.8 previous. 2) Job Openings 9.4 million versus 9.6 million previous. Plenty of employment data all week with the jobs report on Friday.
Monday: 1) Factory Orders -3.6 versus -3.5% expected versus 2.8% prior. UGLY orders.
Friday: 1) ISM Manufacturing 46.7% versus 47.7% expected versus 46.7% prior. Demand remains soft… not a good indicator for the markets short term. 2) Construction Spending 0.6% versus 0.3% expected versus 0.4% prior. 3) Fed officials everywhere 4) Auto Sales 15.5% previous. 4) OPEC’s release of voluntary cuts to production impacted crude oil prices. 5) Boat sales are forecast at 359k down 74.4% from 2021 1.4 million sold. 6) Powell stated that talk of cutting rates is ‘premature’ and more hikes could happen… stocks rose on the comments.
Key Takeaway: 1) Short side of crude an opportunity SCO. 2) Bonds move higher as interest rates decline on the belief of rate cuts. TMF.
Thursday: 1) Weekly jobless claims 218k versus 215k expected versus 209k previous. Continuing claims 1.84 million prior. 2) Chicago PMI 55.8 versus 45 expected versus 44 previous. Suspicious improvement? 3) Pending Home Sales -1.5% versus -2.3% expected versus 1.1% prior. Bad news for the housing sector fell to a record low… worse than 2008. 4) Natural Gas inventories. 5) Personal Income 0.2% versus 0.2% expected versus 0.4% prior. Personal Spending 0.2% versus 0.2% expected versus 0.7% previous. In line with expectations 6) PCE Index 0.0% versus 0.1% expected versus 0.4% prior. Core PCE Index 0.2% versus 0.2% expected versus 0.3% previous. In line with expectations. NOTE: The data was better overall than expected pushing interest rates higher and the dollar was higher.
Wednesday: 1) Weekly MBA Mortgage Index 0.3% versus 3% prior. Interesting as rates decline. 2) GDP second estimate is 5.2% versus 4.9% expected versus 4.9% prior. The bump came from government spending. 3) Retail inventory 0%. Prior 0.4% revised from 0.9%… is this from buying or lack of inventory stock? 4) November Fed Beige Book. Showed a slowing in US economic activity and pullback in discretionary spending.
Tuesday: 1) Home Price Index August up 3.9% versus 4.1% expected versus 2.2% previous. 2) Consumer Confidence 102 versus 101 expected, 99.1 revised from 102.6 prior. 3) Six Fed officials out speaking on inflation… again. Mumbling about rate cuts on the horizon…
Monday: 1) New Home Sales Oct -5.6% versus -5% expected versus +8.6 prior. Average price fell to $487k. 2) Dallas Fed PMI -19.9 showing 19 months of contraction. New Orders fell -20.5 versus -8.8 previous. 3) Auto Inventories have jumped to 186-day high for Dodge and 120 days for Lincoln… significant change… is debt, rates, or consumer tapped out the rationale? 4) OPEC+ meeting this Thursday with hopes of more cuts to production… not likely in reality, maybe in words.
China and India are calling the EU ‘carbon tax’ ‘ ill-conceived’. This will bring the question of doing business with large economies or being “green”. It could get interesting.
A Missouri jury found that the National Realtors Association colluded to maintain high brokerage commissions. They awarded the plaintiff $1.8 billion. ZG fell 6.8% on the news… other real companies were lower as well… worth watching how this unfolds moving forward.