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

Date Event Survey Actual Prior Revised
10/23/2023 Chicago Fed Nat Activity Index -0.14 0.02 -0.16 -0.22
10/24/2023 Philadelphia Fed Non-Manufacturing Activity -16.6
10/24/2023 S&P Global US Manufacturing PMI 49.4 49.8
10/24/2023 S&P Global US Services PMI 49.9 50.1
10/24/2023 S&P Global US Composite PMI 50 50.2
10/24/2023 Richmond Fed Manufact. Index 3 5
10/24/2023 Richmond Fed Business Conditions -5
10/25/2023 MBA Mortgage Applications -6.90%
10/25/2023 New Home Sales 682k 675k
10/25/2023 New Home Sales MoM 1.00% -8.70%
10/26/2023 Wholesale Inventories MoM 0.10% -0.10%
10/26/2023 Advance Goods Trade Balance -$86.0b -$84.3b -$84.6b
10/26/2023 GDP Annualized QoQ 4.30% 2.10%
10/26/2023 Personal Consumption 4.00% 0.80%
10/26/2023 Retail Inventories MoM 1.10%
10/26/2023 GDP Price Index 2.70% 1.70%
10/26/2023 Durable Goods Orders 1.50% 0.10%
10/26/2023 Core PCE Price Index QoQ 2.50% 3.70%
10/26/2023 Durables Ex Transportation 0.30% 0.40%
10/26/2023 Cap Goods Orders Nondef Ex Air 0.00% 0.90%
10/26/2023 Cap Goods Ship Nondef Ex Air 0.30% 0.70%
10/26/2023 Initial Jobless Claims 208k 198k
10/26/2023 Continuing Claims 1738k 1734k
10/26/2023 Pending Home Sales MoM -1.60% -7.10%
10/26/2023 Pending Home Sales NSA YoY -18.80%
10/26/2023 Kansas City Fed Manf. Activity -8
10/27/2023 Personal Income 0.40% 0.40%
10/27/2023 Personal Spending 0.50% 0.40%
10/27/2023 Real Personal Spending 0.30% 0.10%
10/27/2023 PCE Deflator MoM 0.30% 0.40%
10/27/2023 PCE Deflator YoY 3.40% 3.50%
10/27/2023 PCE Core Deflator MoM 0.30% 0.10%
10/27/2023 PCE Core Deflator YoY 3.70% 3.90%
10/27/2023 U. of Mich. Sentiment 63 63
10/27/2023 U. of Mich. Current Conditions 66.7
10/27/2023 U. of Mich. Expectations 60.7
10/27/2023 U. of Mich. 1 Yr Inflation 3.80% 3.80%
10/27/2023 U. of Mich. 5-10 Yr Inflation 3.00%
10/27/2023 Kansas City Fed Services Activity 2
10/30/2023 Dallas Fed Manf. Activity -18.1

 

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