Bond auction not as expected:
Amount sold: $39 billion
Yield 4.399% vs 4.378% previous session
Bought 68.99% of auction amount
Tail highest since 11/2022
Consumer confidence index improved in November
Overall confidence index November is 102.0 (up from October's actual 99.1).
October data also revised down from 102.6 to 99.1 (lowest since 07/2022)
Of which, the index reflecting confidence in the current economic situation is 138.2 (lowest since April 2021)
This index is based on consumer assessments of current business conditions and labor market.
But the index on Future expectations rose slightly to 77.8 (previous month: 72.7).
This index is based on consumers' short-term outlooks on income, business, and labor market.
Assessment of current financial situation of households improved in November: % positive assessments increased, % negative decreased.
Similarly, expectations for finances in the next 6 months of them also improved: % rating good increased to highest since 07/2022.
2/3 of surveyed consumers still believe a recession is “somewhat” or “very likely” to occur next year.
Labor market confidence indices are trending worse - now at lowest since April 2021.
Estimated index of “% saying more jobs in labor market - % saying hard to find jobs” has declined.
Plans to buy cars, homes, and expensive appliances in the next 6 months are declining - reflecting impact of higher interest rates.
Update on Fed officials' statements
Two Fed officials expressed differing views on inflation and interest rate policy, reflecting divided opinions within the Fed:
Fed Governor Bowman : supports rate hikes if disinflation progress stalls
Fed Governor Waller:
Current policy is well positioned to slow the economy.
If inflation continues to decline in the coming months, that will be a valid economic reason to lower policy rates.
FYI: 2Y T-bond yield down -12bps below 4.8% after Fed official's remarks.
Dollar hits lowest since August as investors bet on rate cuts.
US home prices rise for 7 consecutive months
According to Case-Shiller, home prices in the 20 largest US cities in September rose +0.67% M/M and +3.92% Y/Y - 7th consecutive month of increase.
3 urban areas with strongest price increases in September: Detroit (+6.7%), San Diego (+6.5% y/y) and New York (+6.3% y/y).
However, with mortgage rates still too high, home prices are expected to continue declining.
Home buying conditions index has fallen to super low levels: only seen ONCE since the 1980s.
Capital inflows into the stock market are increasing rapidly
When bond yields fall, stocks become more attractive:
Goldman Sachs' risk appetite indicator surges to one of the highest levels in the past 2 years.
Global capital flows into equities have picked up again in recent weeks.
Retail investors bought +$4.8 billion in stocks last week, the highest amount since April 2022
CTAs bought $95 billion in US stocks last month, the largest amount ever recorded according to Goldman Sachs.
Other news
Tesla will officially launch Cybertruck this Thursday. Tesla stock (^TSLA) surged today on the announcement.
Binance US: Changpeng Zhao steps down as chairman of the board, 1 week after pleading guilty before the Department of Justice and resigning as Binance CEO.
Saudi Arabia asks OPEC+ alliance members to cut oil production quotas to bolster the global market, but faces strong opposition.
Weekly inflows into Gold funds just hit the largest level since May
Gold price heading to the highest level since June.
China's financial leverage is now 3 times the size of its economy - the highest level ever
Charles Koch billionaire political alliance backs former US Ambassador to the UN Nikki Haley for president.
Amazon is seeking 50,000 sq ft office space in Florida as Jeff Bezos plans to relocate from Seattle.
While the national office vacancy rate is now 20%, conversely, available office space in Florida is BELOW pre-pandemic levels.
Could Florida become a new TechHub?
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