About 2.4 trillion USD options will expire today, most of which are options related to the S&P 500 index.
Housing starts market improves: Number of new homes started increases as demand starts to return
Number of new homes started and building permits surprisingly increase in October:
Contrary to concerns from mortgage rate pressure and decline in homebuilder numbers (bloomberg headline)….
… both new home starts and permits recorded increases in October, reaching respectively 1.9% and 1.1% MoM.
After seasonal adjustment, the indicators all recorded slight increases but still maintain the overall downward trend.
All housing segments recorded increases, with single-family housing building permits increasing for 10 consecutive months.
Although the number of new home completions decreased, new project starts increased (due to increased building permits — above), leading to a slight increase in construction jobs.
According to forecasts from the National Association of Home Builders, builder revenues may continue to decline until the end of 2024 (red line).
=> Even though the housing market is still stalled, builders continue to build hoping housing demand will increase again with lower interest rates!
Mortgage demand has returned as mortgage rates decline for 3 consecutive weeks
Mortgage rates record decline for three consecutive weeks to the lowest level in over a month.
→ Mortgage applications also increase again as buyers face reduced borrowing pressure.
However, the rate of homeowners without mortgage debt is at its highest ever
Nearly 40% of homeowners had no mortgage debt as of 2022 - many of them baby boomers who refinanced when rates were low.
Of the 84.6 million homes in 2022, nearly 33% are owned by people aged 65 and over, up 4.6% from 10 years ago.
→ In the high interest rate situation, public mortgage demand has increased again but remains quite low.
Market trends: Investment in Treasury bonds decreases but money market increases
Treasury funds record first outflows since February
Total outflows of over 1 billion USD appear to have been rotated into stocks. Last week, according to BoA, investors bought nearly 24 billion USD in stocks.
→ Recent inflation data has improved investor sentiment.
In addition, inflows into money market funds (MMF) continue to increase for the 4th consecutive week, up 21.9 billion USD, reaching a record 5.73 trillion USD.
Inflows went into both types of MMF funds: those for retail investors and those for financial institutions.
Some other news:
UK retail sales unexpectedly decline in October as consumers cut spending → Rate hike cycle restrains the economy.
Retailer Gap stock surges +17% pre-market after Q3 earnings beat expectations
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