Succinct Summation of the Week's Events

Succinct Summation of the Week's Events:

Positives,

1)The November US manufacturing and services PMI rose to 55.3 from 54.1 and again expansion solely led by the services side of the economy. Services rose to 57 from 55 while manufacturing remains in contraction at 48.8 vs 48.5 in the month before. Much of the increase in confidence was "attributed to the prospect of lower interest rates, improved economic growth, and more supportive business policies from the new administration in 2025."

2)Initial jobless claims fell to 213k from 219k and that was 7k less than expected. The 4 week average fell to 218k from 222k.

3)Even with another uptick in mortgage rates, albeit slightly w/o/w to 6.90% from 6.86%, purchase apps rose 2% w/o/w and refi's were higher by 1.8% w/o/w after 7 weeks of declines.

4)The November NAHB home builder index rose 3 pts m/o/m to 46, better than the estimate of 42, though still below 50. The upside was mostly due to a jump in the Expectations component to 64 from 57. The Present Situation is still below 50, though barely at 49 vs 47 last month. Reflecting still the big challenge of affordability, Prospective Buyers Traffic was just 32 but up 3 pts from October. The NAHB is pointing to the election results as reason for the lift in builder confidence. “With the elections now in the rearview mirror, builders are expressing increasing confidence that Republicans gaining all the levers of power in Washington will result in significant regulatory relief for the industry that will lead to the construction of more homes and apartments.”

5)October existing home sales are still hovering around 30 yr lows but did rise to 3.96mm from 3.83mm. Months' supply was 4.2 from 4.3 in September and 4.2 in August. The median home price rose 4% y/o/y. First time buyers made up just 27% of transactions vs 26% in the two prior months and vs 28% in the same month last year. 

6)In the September Treasury International Capital flow data, obviously pre-election, foreigners bought a net $77b of US notes and bonds BUT the breakdown of the buyers is key to differentiate. 'Official' central banks continue to sell and for a 5th straight month led by Japan, China and Hong Kong. The offset was from private foreign buyers but even here could very well be mostly hedge funds and other short term focused buyers, especially ahead of the election.

7)From Walmart: "Transaction counts and unit volumes were positive across each segment, and we continue to gain market share in the US, both in grocery and general merchandise. Households earning more than $100,000 made up 75% of our share gains. In the US, in-store volumes grew, curbside pickup grew faster and delivery sales grew even faster than that...We had almost no like-for-like inflation in the US this quarter. It was nice to see general merchandise grow low single digits in the US even as prices are deflated by over 4%. We currently have about 6,000 rollbacks in Walmart US across all categories. We're feeling some margin pressure from growth in GLP-1 drugs, so we're pleased to see general merchandise sales be positive."