Posts by Gary Hall

Summary Of the Markets Today:

• The Dow closed up 829 points or 2.59%,
• Nasdaq closed up 2.87%,
• S&P 500 up 2.46%,
• WTI crude oil settled at $88 down $0.97,
• USD $110.89 down $0.11,
• Gold $1648 down $17.30,
• Bitcoin $20,620 up $360 – Session Low 20,069,
• 10-year U.S. Treasury 4.014% up 0.057%
• Baker Hughes Rig Count: U.S. -3 to 768 Canada +2 to 212

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

Inflation-adjusted personal income was little changed whilst inflation-adjusted spending increased month-over-month in September 2022. The better way to look at this situation is to analyze year-over-year growth which shows spending remains fairly steady at 1.9% growth whilst income is an improving NEGATIVE 2.9% (see graph below). This tells me economic growth is holding steady. Inflation too is holding steady at 6.2% which means the federal funds rate increases are yet to have an effect.

The Pending Home Sales Index (PHSI) year-over-year pending transactions slid by 31.0%. According to the National Association of Realtors, the Federal Reserve’s inflation battle which is resulting in higher interest rates is harming the housing market. No question that the housing market is in a recession.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 194 points or 0.61%,
• Nasdaq closed down 1.63%,
• S&P 500 down 0.61%,
• WTI crude oil settled at $89 up $0.78,
• USD $110.89 up $0.88,
• Gold $1666 down $3.60,
• Bitcoin $20,404 down 1.57% – Session Low 20,370,
• 10-year U.S. Treasury 3.906% down 0.093%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

The number of borrowers classified as seriously delinquent (90 or more days late) on their mortgage payments in August 2022 dropped to the lowest level recorded since April 2020, while the overall delinquency rate remained near a record low. Molly Boesel, Principal Economist for CoreLogic stated:

The share of U.S. borrowers who are six months or more late on their mortgage payments fell to a two-year low in August and was less than one-third of the pandemic high recorded in February 2021. Furthermore, the foreclosure rate remained near an all-time low, which indicates that borrowers who were moving out of late-stage delinquencies found alternatives to defaulting on their mortgages.

In the week ending October 22, the 4-week unemployment insurance weekly initial claims moving average was 217,000, an increase of from the previous week’s unrevised average of 212,250.

New orders for manufactured durable goods in September 2022 increased 11.3% year-over-year. Even after adjusting for inflation, durable goods improved 4.6% year-over-year. At this point it is obvious the economy is modestly improving even with high inflation.

The advance estimate of real gross domestic product (GDP) shows the economy increased at an annual rate of 2.6% in 3Q2022. In the second quarter, real GDP decreased 0.6%. Advance estimates historically have been subject to significant change – but it continues the story line that the economy is modestly improving.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 2.37 points or 0.01%,
• Nasdaq closed down 2.04%,
• S&P 500 down 0.74%,
• WTI crude oil settled at $88 up $2.83,
• USD $109.71 down $1.11,
• Gold $1669 up $10.60,
• Bitcoin $20,754 up 2.80% – Session Low 20,018,
• 10-year U.S. Treasury 4.017% down 0.093%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

The number of CEO changes at U.S. companies rose 17% from 63 in August to 74 in September. CEOs who left their posts this year are four years younger on average than those who left their posts last year.

Sales of new single‐family houses in September 2022 were at a seasonally adjusted annual rate of 603,000.  This is 17.6% below September 2021. The median sales price of new houses sold in September 2022 was $470,600 with an average sales price of $517,700.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 337 points or 1.07%,
• Nasdaq closed up 2.25%,
• S&P 500 up 1.63%,
• WTI crude oil settled at $85 down $0.05,
• USD $110.89 down $1.11,
• Gold $1658 up $4.10,
• Bitcoin $20,1151 up 4.12% – Session Low 19,249,
• 10-year U.S. Treasury 4.069% down 0.155%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

The S&P CoreLogic Case-Shiller 20-City Composite posted a 13.1% year-over-year gain, down from 16.0% in the previous month. CoreLogic Deputy Chief Economist Selma Hepp stated:

While the CoreLogic S&P Case-Shiller Index retracts rapidly amid surging mortgage rates — up 13% in August— a handful of markets located in Southeast and South continue to see over 20% annual gains, with Miami and Tampa topping the list. In contrast, Phoenix, Las Vegas and Dallas have now joined the other West Coast cities that are rapidly slowing since the spring peak in home price growth. At this pace, CoreLogic’s Home Price Index forecast suggests annual home price growth will slow to 9% by December, and further down to less than 1% by the end of the first quarter 2023.

The Richmond Fed Manufacturing Survey reported weaker conditions in October 2022. The composite manufacturing index fell from 0 in September to −10 in October, dipping below its August level. Two of its three component indexes deteriorated notably: the indexes for shipments and volume of new orders fell from 14 and −11 in September to −3 and −22 in October, respectively. The third component, the employment index, remained unchanged at 0 in October, as hiring challenges persisted.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 418 points or 1.34%,
• Nasdaq closed up 0.86%,
• S&P 500 up 1.19%,
• WTI crude oil settled at $85 down $0.37,
• USD $111.85 down $0.97,
• Gold $1654 down $2.30,
• Bitcoin $19,341 down 0.82% – Session Low 19,195,
• 10-year U.S. Treasury 4.242% up 0.03%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

The Chicago Fed National Activity Index (CFNAI)’s three-month moving average moved up to +0.17 in September 2022 from +0.04 in August. Periods of economic expansion have historically been associated with values of the
three-month moving average above –0.70. The bottom line is that this index [which I consider the best coincident index] is saying the economy is healthy and expanding.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 749 points or 2.47%,
• Nasdaq closed up 2.31%,
• S&P 500 up 2.37%,
• WTI crude oil settled at $85 up $0.14,
• USD $111.85 down $0.97,
• Gold $1660 up $22.90,
• Bitcoin $19,066 down 0.70% – Session Low 18,943,
• 10-year U.S. Treasury 4.221% down 0.005%
• Baker Hughes Rig Count: U.S. +2 to 771 Canada -6 to 210

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

The September 2022 Monthly Treasury Statement issued by US Treasury shows the calendar year had a deficit of $1,375,389,000,000.

 

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 90 points or 0.30%,
• Nasdaq closed down 0.61%,
• S&P 500 down 0.80%,
• WTI crude oil settled at 85 down $1.04,
• USD $112.88 down $0.01,
• Gold $1617 down $21.60,
• Bitcoin $19,066 down 0.70% – Session Low 18,943,
• 10-year U.S. Treasury 4.237% up 0.108%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

Manufacturing activity in the Philly Fed region continued to decline overall this month. The survey’s indicators for general activity and new orders remained negative, and the shipments index was little changed at a low but positive reading. The survey’s future general activity indexes suggest that the surveyed firms expect declines overall over the next six months. Another indication that the manufacturing sector of the U.S. is slowing.

In the week ending October 15, the advance figure for Unemployment Insurance Weekly Claims seasonally adjusted  4 week moving average was 212,250, an increase of 1,250 from the previous week’s revised average. The previous week’s average was revised down by 500 from 211,500 to 211,000. It is expected that the economic slowing as a result of the Fed fighting inflation will cause an increase in initial claims.

September 2022 existing-home sales slowed for the eighth consecutive month to a decline of 23.8% year-over-year. The median existing-home sales price is up 8.4% from one year ago. The inventory of unsold existing homes declined for the second straight month to the equivalent of 3.2 months’ supply at the current monthly sales pace.

Imports into the USA generally indicate how the economy is doing. The Ports of Los Angeles and Long Beach handle 40% of the USA container traffic and is a good indicator of the economy. Imports were down 18% YoY in September, and exports were up 2% YoY.  The tea leaves are saying that the economy is slowing.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 100 points or 0.32%,
• Nasdaq closed down 0.85%,
• S&P 500 down 0.67%,
• WTI crude oil settled at $86 up $1.91,
• USD $112.89 up $0.76,
• Gold $1634 down $21.50,
• Bitcoin $19,216 down 0.14% – Session Low 19,117,
• 10-year U.S. Treasury 4.129% up 0.129%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

New privately owned housing units continue its downward trend for permits issued (down 3.1% year-over-year – blue line on the graph below) and housing starts (down 7.7% year-over-year – red line on the graph below) – but construction completions remained strong (up 15.7% year-over-year – green line on the graph below). The climbing mortgage rates is affecting this sector.

The October 2022 Federal Reserve’s Beige Book states:

National economic activity expanded modestly on net since the previous report; however, conditions varied across industries and Districts. Four Districts noted flat activity and two cited declines, with slowing or weak demand attributed to higher interest rates, inflation, and supply disruptions. Retail spending was relatively flat, reflecting lower discretionary spending, and auto dealers noted sustained sluggishness in sales stemming from limited inventories, high vehicle prices, and rising interest rates.

The Beige Book summarizes comments from contacts outside the Federal Reserve system. The Beige Book has not been timely in documenting recessions – but this month it appears they are saying the economy grew very little.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 338 points or 1.12%,
• Nasdaq closed up 0.9%,
• S&P 500 up 1.14%,
• Gold $1656 down $7.80,
• WTI crude oil settled at $83 down $2.37,
• 10-year U.S. Treasury 3.996% down 0.019%,
• USD index $112.03 little changed,
• Bitcoin $19,373 down $275

Today’s Economic Releases:

September 2022 Industrial production increased 5.3% year-over-year with the components: manufacturing up 4.8% year-over-year; mining up 11.1% year-over-year; and utilities up 0.5% year-over-year. All components improved over the previous month.

U.S. single-family home rental costs posted an 11.4% year-over-year increase in August 2022, marking the fourth straight month of annual deceleration. Even so, rental costs remained elevated, with annual growth running at about five times the rate than in August 2020 in the midst of the COVID-19 pandemic. A shortage of available rental units continues to fuel price growth, although inflation and worries over a looming recession should begin to temper increases. CoreLogic’s detailed view by rental prices:

• Lower-priced (75% or less than the regional median): 12.9%, up from 7.4% in August 2021
• Lower-middle priced (75% to 100% of the regional median): 12.8%, up from 8.3% in August 2021
• Higher-middle priced (100% to 125% of the regional median): 12.3%, up from 9.4% in August 2021
• Higher-priced (125% or more than the regional median): 10.1%, down from 10.7% in August 2021

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 551 points or 1.86%,
• Nasdaq closed up 3.43%,
• S&P 500 up 2.65%,
• WTI crude oil settled at $85.49 down $0.13,
• USD $112.13 down $1.18,
• Gold $1653 up $4.20,
• Bitcoin $19,543 up 1.04% – Session Low 19,156,
• 10-year U.S. Treasury 4.021% up 0.013%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

The New York Fed’s Manufacturing Survey headline general business conditions index declined eight points to -9.1 in October 2022 (negative numbers suggest worsening conditions). As manufacturing is a minor component of the economy, this indicator by itself is unable to warn of a recession – having said that it does usually suggest an economy which is not strong.

A summary of headlines we are reading today: