Morning Report: Big week for data ahead

Vital Statistics:

 LastChange
S&P futures4,64348.2
Oil (WTI)72.484.48
10 year government bond yield 1.58%
30 year fixed rate mortgage 3.36%

Stocks are rebounding today after getting smacked on Friday. Bonds and MBS are down.

Stocks were hit hard late last week on news about a new variant of COVID – Omicron. The moves were probably exaggerated given that many participants were taking Friday off, so we’ll see if this move has legs.

Black Friday sales were up 48% compared to last year’s depressed level. That said, they were below 2019. Lots of Black Friday sales make me wonder if demand is slipping. With all of the apparent shortages out there, I thought retailers would not need to cut prices to get business.

We have a big week for data. The most important numbers will probably be the FHFA House Price Index tomorrow, which will determine the conforming loan limits for 2022. The jobs report on Friday will be big, along with ISM data and construction spending. Jerome Powell also speaks tomorrow.

More Fed officials are comfortable with increasing the pace of tapering and raising rates more quickly. “Various participants noted that the (policy-setting) Committee should be prepared to adjust the pace of asset purchases and raise the target range for the federal funds rate sooner than participants currently anticipated if inflation continued to run higher than levels consistent with the Committee’s objectives,” the Fed said in the minutes.

Pending Home Sales rose 7.5% in October, according to NAR. “Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later,” said Lawrence Yun, NAR’s chief economist. “This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low. The notable gain in October assures that total existing-home sales in 2021 will exceed 6 million, which will shape up to be the best performance in 15 years.” The hottest markets were Jacksonville, Tampa, Dallas and Nashville.

Author: Brent Nyitray

In the physical sciences, knowledge is cumulative. In the financial markets, it is cyclical

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