Markets will be focused on inflation this week

___

Published Date 11/27/2023

MasterCard SpendingPulse showed that retail sales on Black Friday were up 2.5% year/year while Adobe Analytics estimated growth of 5.5%; year/year 7.5%. European Central Bank policymaker Muller said that inflation is clearly slowing and that another rate hike should not be necessary.

Last Week’s Changes: The 10 year note increased 3 bps to 4.47%, the 2 year note +5 bp. FNMA 6.5 30 year coupon this week -17 bps. The DJIA +443, NASDAQ +46, S&P +45. Crude oil -$0.53, gold +$21. Dollar index -0.53, Bitcoin increased 990.

This morning the 10 year note opened at 4.45% -2 bps, MBSs started +5 bps at 8:30 am ET.

At 9:30 am the DJIA opened +11, NASDAQ +5, S&P -3. FNMA 6.5 30 year coupon at 9:30 am +16 bps from Friday’s close and +17 bp from 9:30 am Friday.

At 10 am October new home sales expected at 725K declined to 679K from 719K (revised from 759K). Sales were expected to have declined 4.5% year/year but fell 5.6%. Details this afternoon.

At 11:30 am $54B 2 year note auction.

At 1 pm $55B 5 year note auction.

Unlike last week, this week has a few key data points, headlined by PCE inflation on Thursday. Consumer confidence index tomorrow, weekly jobless claims, personal income, and spending. Treasury will auction 2s and 5s today at 11:30 am and 1 pm respectively. Tomorrow 7 year note auction. Last week OPEC+ delayed its meeting that was scheduled for last Sunday, according to OPEC folks the meeting has been scheduled for Thursday. The price of oil has been dropping recently with more oil than is needed, the Saudis want more producers to cut output but division within the group is wide, the reason the meeting was called off last week.

According to forecasts Thursday’s October PCE, Powell’s go to inflation indicator will decline compared to September. No news that the Fed is finished increasing rates although we will continue to get some Fed officials continuing to sound concerns. The key central banks around the world are echoing the same message, no more increases. The issue now for traders and investors, when will the Fed and other central banks begin lowering rates? The stock market charged up with most analysts still seeing higher levels for the key indexes.

This Week’s Economic Calendar:

Monday: October new home sales (725K from 759K), $54B 2 year note auction, $55B 5 year note auction.
Tuesday: Sept Case/Shiller home price index (+0.7% month/month, year/year +3.8%), Nov consumer confidence from the Conference Board. (101.50 from 102.06).
Wednesday: MBA mortgage applications, Q3 preliminary GDP (second estimate 4.9% unch from 1st estimate) $39B 7 year note auction.
Thursday: weekly jobless claims (219K from 209K), October PCE (+0.1% month/month, year/year +3.1% from 3.4%, core month/month +0.2% from +0.3%, year/year +3.5% from 3.7%), October personal income and spending (income +0.2% from +0.3%, spending +0.2% from +0.7%), Nov Chicago purchasing managers index (45.1 from 44.0), Oct pending home sales (-2.0%).
Friday: November ISM manufacturing index (47.5 from 46.7), October construction spending (+0.3% from +0.4%).

Source: TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

This communication (including attachments) is for information purposes only, is not an offer, solicitation, recommendation or commitment for any transaction or as a confirmation of any transaction.

Bobbie Jo Haggard, NMLS 92472;
Licensed to do business in Washington & Oregon.

Heartland Mortgage, Inc. NMLS# 3205; Office(509) 529-3280
NMLS Consumer Access website: (www.nmlsconsumeraccess.org)