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Saturday’s: 9AM 1590 AM/97.9 FM KVTA
Sunday’s: 7AM K-EARTH 101 FM
Listen Live
Saturday’s: 9AM 1590 AM/97.9 FM KVTA
Sunday’s: 7AM K-EARTH 101 FM
Rosie the Riveter: The November Richmond Fed Manufacturing Index showed contraction at -9 vs. est. of -1
The Talking Fed: Today we hear from Loretta Mester., Esther George and James Bullard.
Treasury Dump: We get the last auction of the week with today’s 1:00 7 year note auction.
Interest rates fractionally better this morning in a quiet session ahead. No economic data again today, all the data this week happens tomorrow along with the key FOMC minutes from Nov 2nd meeting. Yesterday the 10 yr. note yield increased 1 bps, this morning at 9 am ET down 4 bps, MBS prices about unchanged, by 9:30 am though MBSs engaged and increased 25 bps from yesterday.
Several Federal Reserve speakers are on the docket today, starting with Cleveland Fed President Loretta Mester at 11 am Kansas City Fed President Esther George will make remarks at 2:15 pm, followed by St. Louis Fed President James Bullard 30 minutes later. Not very likely that there will be any significant change in what the officials will have to say. The Fed will begin cutting back from the 75 bp increases, expect 50 bps at the dec FOMC meeting on Dec 15th, then two 25 bp increases in 2023.
The OECD is saying the global economy should avoid a recession next year but the worst energy crisis since the 1970s will trigger a sharp slowdown, with Europe hit hardest, the OECD said, but added that fighting inflation should be policymakers’ top priority. It forecast that world economic growth would slow from 3.1% this year – slightly more than the OECD foresaw in its September projections – to 2.2% next year, before accelerating to 2.7% in 2024. It forecast that the 19-country euro zone economy would grow 3.3% this year then slow to 0.5% in 2023. The U.S. economy was set to hold up better, with growth expected to slow from 1.8% this year to 0.5% in 2023. With monetary policies tightening and taking effect and energy price pressures ease, inflation across OECD countries was seen falling from more than 9% this year to 5.1% by 2024.
This afternoon at 1 pm Treasury will auction $35B of 7s, yesterday’s 2 and 5 yr. auctions were soft compared to their 12 auction averages.
At 9:30 am the DJIA opened +193, NASDAQ +40, S&P +21. 10 yr. at 9:30 am 3.79% -4 bps. FNMA 6.0 30 yr. coupon at 9:30 am +25 bps but down 13 bps from 9:30 am yesterday.
The WSJ reporting investor buying of homes tumbled 30% in the third quarter, a sign that the rise in borrowing rates and high home prices that pushed traditional buyers to the sidelines are causing these firms to pull back, too. Companies bought around 66,000 homes in the 40 markets tracked by real-estate brokerage Redfin during the third quarter, compared with 94,000 homes during the same quarter a year ago. The percentage decline in investor purchases was the largest in a quarter since the subprime crisis, save for the second quarter of 2020 when the pandemic shut down most home buying. With investors’ large cash positions, and with big firms such as JPMorgan Chase & Co. planning to increase its exposure to the home-buying business, investors are poised to resume more aggressive buying when rates or home prices begin to ease.
Should be quiet today with Fedspeak and key data tomorrow. By 12 pm tomorrow the halls of Wall Street should be empty with only caretakers holding the fort until next Monday. Stock market closes at 1 pm Friday, the bond market at 2 pm.
