Market Observations - Sep 27
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Econ Brief 9/26:?This morning, the FHFA House Price Index rose 0.8% in July, double the rise expected and following a 0.4% gain the month prior. Also this morning, the S&P CoreLogic 20-City Home Price Index rose 0.87% in July, surpassing the 0.70% gain expected and following a 0.91% gain the month prior. The National Composite Index, meanwhile, increased 0.65% in July following a 0.68% gain in June. Over the past 12 months, the 20-city home price index rose 0.11%, and the national composite index gained 0.96%. Additionally, this morning, new home sales dropped 8.7% from 739k to 675k in August, a five-month low. According to forecasts, new home sales were expected to decline 2.2% in August. Over the past 12 months, sales rose 5.8%, down from the 36.1% gain the month prior. Due to a fall in sales, the months’ supply of new homes ticked up from 7.0 months to 7.8 months, a five-month high.
The Conference Board’s Consumer Confidence Index dropped from 108.7 to 103.0 in September, more than the expected decline to 105.5 and a 4-month low. In the report’s details, a gauge of current conditions ticked up from 146.7 to 147.1, a 2-month high, while a gauge of future expectations dropped from 83.3 to 73.7 in September, a 4-month low. Finally, this morning, the Richmond Fed Manufacturing Activity Index unexpectedly rose from -7 to a reading of +5 in September, the highest reading since April 2022. According to the median forecast, the index was expected to remain at -7 for the second consecutive month.
U.S. Tuesday market wrap:?Stock market investors went to a dark place as they imagined a world where big tech companies are forced to break up. Additionally, growing worries about the global economy added to the negative sentiment. The Dow lost 388 points or 1.1%, the S&P sank 1.5%, and the Nasdaq tumbled 1.6%. All eleven S&P sectors closed red. Energy was the best -0.58%, and utilities were the worst -2.99%.
Electric vehicle startup Fisker rose 10% after the company said it is on track to hit its current delivery guidance this year. If it can ramp up to produce 300 vehicles per day during the fourth quarter, it would bring full-year production to 28,000 units, as opposed to its 20,000 to 23,000 guidance.
The S&P 500 hit 3-month lows yesterday, while the Conference Board’s measure of consumer confidence fell to a 4-month low. New home sales fell to their lowest level in five years. The U.S. federal government appears headed for a partial shutdown on October 1. Still, the Dollar rides high. It is extending its gains against several G10 currencies, including the euro and sterling. The Swiss franc is moving lower for the 12th consecutive session. The beleaguered yen and yuan are consolidating near their recent lows. Most emerging market currencies are also softer.
Gold has been sold below $1900 for the first time this month.
Despite yesterday’s sharp losses in the U.S., equities are trading higher today.
Aside from Australia and New Zealand, the large bourses in Asia rose, and the MSCI Asia Pacific Index rose for the first time this week and only the second time since September 15.
The same is true of Europe’s SXXP. It is posting a small gain through the European morning.
U.S. index futures are also trading with a firmer bias.
The sell-off in bonds is stabilizing today. European benchmark yields are mostly 2-4 bps lower. The 10-year U.S. Treasury yield is 4bps lower to hover around 4.50%. The U.S. two-year yield, which was near 5.20% last week, is near 5.05% now (20-day moving average is ~5.02%).
Lastly, November WTI recovered smartly from a pullback to $88.20 and settled near $90.40. It has approached $91.60 today, and the high for the year, set last week, was slightly shy of $92.45. ?
Australia’s monthly CPI report was lifted by rising energy prices. It stands at 5.2%, as expected, after 4.9% in July. Except for April (and now August), Australia’s monthly CPI has trended lower this year after peaking at 8.4% at the end of last year. The market expects the new central bank governor, Bullock, to stand pat in Q4 but sees a strong chance of a hike in Q1 24. The RBA meets on October 3, and the cash rate is at 4.10%.
Weaker Boeing orders likely dragged durable goods orders in August lower for the second consecutive month. Boeing orders surged by 304 in June and fell to 52 in July and 45 in August. The three-month moving average in Q1 was 40. What is notable about August’s orders was that nearly 29% were domestic orders after practically none since January. Deliveries are less volatile than orders, and the three-month average was 43 in Q1 and 46 average in the three months through August. Excluding transportation orders, durable goods orders may have risen by 0.2% after a 0.4% gain in July. The shipment of non-defense orders, excluding transportation, is expected to have been flat in August and has not risen since May.
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Crypto Market Rundown: ?
The global crypto market cap is now $1.06T, a +1.53% increase over the last day.
Both BTC ($26,720) and ETH ($1,620) are up ~2% in the past 24h. Aside from the majors, 12 of the top 100 altcoins are up more than +3% in the day.
Top 5 Gainers on Uphold Ascent in the past 24H:?
Top 5 Losers on Uphold Ascent in the past 24H:?
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