October 23, 2023 Headlines

The 10-year Treasury yield rose above 5% earlier this morning for the first time since 2007 in a continuation of the bear steepening trend in the U.S. bond market. Another day, another steepener. The 2-year/10-year spread is now just -12 basis points (bps), nearly 100 bps steeper than the peak inversion level of -109 bps on March 8. This week’s economic calendar is headlined by the first look at Q3 GDP (Thursday) and the September PCE report (Friday). GDP is expected to have risen a robust 4.3% last quarter, driven by an estimated 4% increase in personal consumption.

In housing news, housing affordability continues to worsen amid surging mortgage rates and sticky home prices. The National Association of Realtors’ housing affordability index is at the lowest level since the index’s inception in 1986. Separately, real estate firm CBRE notes that it’s never been a worse time to buy a home versus renting, according to a Wall Street Journal article yesterday. The average monthly new mortgage payment is 52% higher than the average apartment rent, significantly higher than the previous peak of 33% in Q2 2006. CBRE began tracking the data in 1996.

Jason Haley
Chief Investment Officer

10/23/2023Chicago Fed Nat Activity Index-0.140.02-0.16-0.22
10/24/2023Philadelphia Fed Non-Manufacturing Activity-16.6
10/24/2023S&P Global US Manufacturing PMI49.449.8
10/24/2023S&P Global US Services PMI49.950.1
10/24/2023S&P Global US Composite PMI5050.2
10/24/2023Richmond Fed Manufact. Index35
10/24/2023Richmond Fed Business Conditions-5
10/25/2023MBA Mortgage Applications-6.90%
10/25/2023New Home Sales682k675k
10/25/2023New Home Sales MoM1.00%-8.70%
10/26/2023Wholesale Inventories MoM0.10%-0.10%
10/26/2023Advance Goods Trade Balance-$86.0b-$84.3b-$84.6b
10/26/2023GDP Annualized QoQ4.30%2.10%
10/26/2023Personal Consumption4.00%0.80%
10/26/2023Retail Inventories MoM1.10%
10/26/2023GDP Price Index2.70%1.70%
10/26/2023Durable Goods Orders1.50%0.10%
10/26/2023Core PCE Price Index QoQ2.50%3.70%
10/26/2023Durables Ex Transportation0.30%0.40%
10/26/2023Cap Goods Orders Nondef Ex Air0.00%0.90%
10/26/2023Cap Goods Ship Nondef Ex Air0.30%0.70%
10/26/2023Initial Jobless Claims208k198k
10/26/2023Continuing Claims1738k1734k
10/26/2023Pending Home Sales MoM-1.60%-7.10%
10/26/2023Pending Home Sales NSA YoY-18.80%
10/26/2023Kansas City Fed Manf. Activity-8
10/27/2023Personal Income0.40%0.40%
10/27/2023Personal Spending0.50%0.40%
10/27/2023Real Personal Spending0.30%0.10%
10/27/2023PCE Deflator MoM0.30%0.40%
10/27/2023PCE Deflator YoY3.40%3.50%
10/27/2023PCE Core Deflator MoM0.30%0.10%
10/27/2023PCE Core Deflator YoY3.70%3.90%
10/27/2023U. of Mich. Sentiment6363
10/27/2023U. of Mich. Current Conditions66.7
10/27/2023U. of Mich. Expectations60.7
10/27/2023U. of Mich. 1 Yr Inflation3.80%3.80%
10/27/2023U. of Mich. 5-10 Yr Inflation3.00%
10/27/2023Kansas City Fed Services Activity2
10/30/2023Dallas Fed Manf. Activity-18.1


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