Vital Statistics:
Stocks are flattish this morning after investors return from the Thanksgiving Day holiday. Bonds and MBS are up small.
The week ahead will have some important economic data with inflation, home prices, the second revision to Q3 GDP, and the ISM data.
New Home sales fell 5.6% in October, according to the Census Bureau. This was up almost 18% from a year ago. The number was well below expectations given that interest rates spiked in October. The median new home price was down 18% compared to a year ago.
Black Friday sales online rose 7.5% YOY, to record levels. Some of that increase is due to inflation, and changing consumer preferences over how to shop. It looks like in-store purchases were up only 1% compared to a year ago. “We’ve seen a very strategic consumer emerge over the past year where they’re really trying to take advantage of these marquee days, so that they can maximize on discounts,” said Vivek Pandya, a lead analyst at Adobe Digital Insights.
We did see a 73% increase in consumers using buy-now-pay-later, which isn’t necessarily a great sign for consumer spending.
The Washington Post had an article over the weekend which discussed the disconnect between the economic numbers and peoples’ perception of the economy. I talked about what is going on in my latest Substack piece.
I found this interesting. Zero day options are puts and calls that are only valid for one day. In August, they accounted for 50% of the overall S&P 500 options volume, according to CBOE. I am surprised that 0DTE options (one day) are that popular – they seem like a speculative instrument that an institutional investor wouldn’t find useful. But apparently retail investors love them. I had no idea just how much they did.
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