Succinct Summation of the Week's Events

Succinct Summation of the Week’s Events:

Positives,

1)The election is over.

2)For those feeling the restrictive level of interest rates, and can borrow SOFR plus, the Fed gave us another rate cut.

3)Initial claims at 221k were about as expected though up a touch from 218k last week, reflecting, at least measured here, a muted pace of firing’s. Because the hurricane induced 260k print dropped out of the calculation, the 4 week average fell to 227k from 237k.

4)The October ISM services index rose to 56 from 54.9 and that was 2.2 pts above expectations. That’s also the highest level since July 2022. Internals though were mixed. The industry breadth improved with 14 of 18 industries surveyed seeing growth vs 12 in the month before. Just 2 saw a contraction in business vs 5 in September.

5)The November UoM consumer confidence figure rose to 73 from 70.5, 2 pts above expectations and that is the highest since April when it printed 77.2. It still though remains well below the February 2020 level of 101. The internals were mixed as Current Economic Conditions fell .5 pt m/o/m but was more than offset by a 4.4 pt rise in Expectations. One yr inflation expectations fell one tenth to 2.6% and that is the least since December 2020 helped by lower gasoline price expectations but the 5-10 yr guess rose to 3.1% which matches the highest since November 2023. Spending intentions were little changed. The UoM said that notwithstanding the dropping inflation expectations, “consumers remain frustrated about the persistence of high prices. About 44% of consumers spontaneously mentioned that high prices eroded their personal finances, little changed from last month. At the same time, consumers expressed fewer price concerns about major purchases relative to October.”

6)The Atlanta Fed’s October wage tracker rose 4.6% y/o/y and still running well above the pre Covid trend.

7)From last Friday, October auto sales totaled 16.04mm at a seasonally adjusted annualized rate and that was above the estimate of 15.8mm and compares with 15.5mm in October 2023 and 16.55mm in October 2019.

8)With another jump in mortgage rates to 6.81% according to Freddie Mac for the average 30 yr term, purchase applications fell 5.1% w/o/w and refi's were down by 18.5%. 

9)From Sweetgreen: "September was the strongest month in the quarter, and the momentum of September carried on into October, where we're certainly comping within our revised upward guide of 6% to 7%."