Morning Report: Holiday sales looking strong

Vital Statistics:

 

Last Change
S&P futures 2945 -6.25
Oil (WTI) 53.63 0.84
10 year government bond yield 1.54%
30 year fixed rate mortgage 3.84%

 

Stocks are slightly lower on trade concerns and weak European data. Bonds and MBS are flat.

 

The upcoming week should be relatively quiet, with only inflation data and a slew of Fed-speak. Since increasing inflation is no longer front and center of the Fed’s concerns, the CPI and PPI should be non-events. We will also get the minutes from the September FOMC meeting on Wednesday.

 

Interesting stat on how long it takes to build a home in different geographic areas. The Mid-Atlantic region (which contains red-tape heavyweights like NY and NJ) is the longest at 10.5 months. The West Coast is right up there as well, at 9.9 months. The Southeast has the shortest timeline at 6.6 months.

 

new construction times

 

IPOs have been a treacherous investment over the past few years, as the venture capitalists and early entry investors have been reaping the rewards, at least for some of the biggest names (Uber, Lyft, Slack). We Work recently pulled its IPO as investors balked at the corporate governance issues and cash burn. While not all IPOs have been disasters, historically they have popped about 20% on the first day of trading. Not any more.

 

The National Retail Federation sees holiday sales at 3.8% – 4.2%, citing trade concerns over holiday spending. This is the low side of the holiday forecasts, which are coming in closer to 5%. The last 5 years have been around 3.7%, so the forecast is for something between “above average” and “great.” Since consumption is about 70% of the economy, we could be looking at better GDP numbers heading into the end of the year, which would put pressure on the Fed to slow down their pace of rate cuts.

16 Responses

  1. The “South Atlantic” includes some big population areas in FL, GA, NC, and VA, so that stat surprises me. I think most of those areas adhere to Southern Building Code.

    Austin, in the city limits, is a freaking nightmare of red tape. Probably is an outlier for the region, as it is for its own metropolitan area.

    Like

  2. You all might be familar with the case that required you to take Part A if you want your social security benefits. https://www.cadc.uscourts.gov/internet/opinions.nsf/890596479218E0818525799D00548389/$file/11-5076-1356903.pdf

    there’s a section in the recent Medicare E.O. that looks to address that.

    Sec. 11. Maximizing Freedom for Medicare Patients and Providers. (a) Within 180 days of the date of this order, the Secretary, in coordination with the Commissioner of Social Security, shall revise current rules or policies to preserve the Social Security retirement insurance benefits of seniors who choose not to receive benefits under Medicare Part A, and propose other administrative improvements to Medicare enrollment processes for beneficiaries.

    (b) Within 1 year of the date of this order, the Secretary shall identify and remove unnecessary barriers to private contracts that allow Medicare beneficiaries to obtain the care of their choice and facilitate the development of market-driven prices.

    Liked by 1 person

  3. Worth a read:

    “What the Bidens Did and Didn’t Do In Ukraine
    By Chris Ladd
    October 6, 2019”

    https://www.politicalorphans.com/what-the-bidens-did-and-didnt-do-in-ukraine/

    Edit: In depth profile of Hunter.

    https://www.newyorker.com/magazine/2019/07/08/will-hunter-biden-jeopardize-his-fathers-campaign

    Like

  4. Taibbi weighs in on the whistle-blower saga:

    “The ‘Whistleblower’ Probably Isn’t

    It’s an insult to real whistleblowers to use the term with the Ukrainegate protagonist
    By Matt Taibbi”

    https://www.rollingstone.com/politics/political-commentary/whistleblower-ukraine-trump-impeach-cia-spying-895529/

    Like

    • I think he’s pretty much got the right of it on this. This isn’t any kind of whistleblower and it’s an orchestrated effort (he doesn’t mention the conversation with Schiff’s staff or the midnight rewrite of the whistleblower rules to allow the hearsay complaint).

      While I don’t think there is anything that unusual (or honestly even that bad) about what Trump actually said or did here—as far as we actually know it— that’s a separate issue entirely from the machinations of the “whistleblower”, which seems awfully Deep State coup-ish to me (although the Deep State assures me that there’s no Deep State, so there’s that). This is not a whistleblowing incident, at all, and the journalists and eatablishment politicians going along with this (including many folks on the Georgetown cocktail party
      right) seem hopelessly misguided here. At least to me.

      I feel like Taibbi isn’t going to last at Rolling Stone, however. Yet I don’t think he can honestly be unaware of the new Puritans running the media and entertainment world these days. So he’s got balls.

      Like

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