High cost of living weighs on US consumer sentiment in October. “Despite strong labor markets, high prices and inflation remain at the top of consumers’ minds,” notes Joanne Hsu, director of the University of Michigan’s Consumer Sentiment survey, in a statement. “Sentiment is currently 8% stronger than a year ago and almost 40% above the trough reached in June 2022. While inflation expectations have eased substantially since then, consumers continue to express frustration over high prices.”
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Book Bits: 12 October 2024
● The Hidden Globe: How Wealth Hacks the World
Atossa Araxia Abrahamian
Review via The New York Times
The rise and spread of these “extraterritorial domains” is the subject of Atossa Araxia Abrahamian’s new book, “The Hidden Globe: How Wealth Hacks the World.” Abrahamian, a journalist who grew up in Geneva, a city rife with enclaves “bound by some Swiss laws, but immune from others,” traces the development of such zones, talking to some of the people who made them happen, including a few who regret their role in helping countries excise pieces of themselves in the name of allowing the already privileged to become even wealthier.
10-Year US Treasury Yield ‘Fair Value’ Estimate: 11 October 2024
The market premium for the US 10-year yield over a “fair value” estimate calculated by CapitalSpectator.com continued to narrow in September. The smaller spread extends a downside trend in recent months following a period of an extremely high market premium vs. the fair value, which is drawn from the average of three models.
Macro Briefing: 11 October 2024
US consumer inflation’s one-year trend slowed again in September, but the core rate rose. The mixed data suggests that disinflation may slow or pause in the months ahead. “September’s CPI report has good news and bad news for the Fed,” Eugenio Aleman, Raymond James’ chief economist, wrote in a note. Citing the softer housing component in the inflation report, which slowed to its lowest annual rate since February 2022, he advises: “The good news is that shelter costs slowed down to 0.2%, month-on-month, and 4.9%, year-over-year. However, it also showed that there are still plenty of upside risks for inflation going forward.” The “shelter” category accounts for more than one-third of the overall CPI.
Mixed Signals Persist For Risk-On Sentiment Outlook
Investor sentiment has wobbled recently, but there’s still room for debate on whether the appetite for risk has peaked for this market cycle. Using a set of ETF pairs to gauge conditions shows that the strongest case for optimism resides in a global asset allocation framework. A more granular view of markets, however, paints a mixed picture, based on prices through Wednesday’s close (Oct. 9).
Macro Briefing: 10 October 2024
More than 3 million residents are without power in Florida as Hurricane Milton moves across the state, leaving a path of destruction. The storm is expected to move off the state’s East Coast into the Atlantic Ocean later today.
US stocks rallied to a new record high on Wednesday, based on the S&P 500 Index. “The stock market is reaching new heights even as assets in money market mutual funds rose to a record $6.5 trillion during the October 2 week,” observe analysts at Yardeni.com. “That’s quite remarkable. Imagine the meltup in stock prices if the Fed continues to lower interest rates.”
Revised Q3 GDP Nowcast Continues To Indicate Solid US Growth
Economic output for the US remains on track to increase at a robust pace in the government’s upcoming third quarter GDP report scheduled for Oct. 30, based on the median nowcast via several sources compiled by CapitalSpectator.com.
Macro Briefing: 9 October 2024
Florida residents fled the Tampa Bay region ahead of Hurricane Milton, which is expected to make landfall tonight. The storm “poses a major threat to life and property as it hammers the state with destructive storm surge, devastating wind damage, potentially catastrophic flooding rainfall and several tornadoes,” the Weather Channel warns. Expected damages are projected to reach $175 billion, according to leading Wall Street analysts.
US trade deficit narrowed to smallest gap in five month in August. Exports increased 2%, the most since February, while imports fell 0.9%.
Rebound In Money Supply Growth Is New Tailwind For US Economy
There are several reasons for downplaying the recent recession warnings. Last week’s dramatically stronger-than-expected rise in September payrolls is one. The revival of US money supply growth in year-over-year terms is another.
Macro Briefing: 8 October 2024
Hurricane Milton threatens “grave danger” for west-central Florida, reports The Weather Channel. Citing the National Hurricane Center: “Milton has the potential to be one of the most destructive hurricanes on record” for the Tampa-St. Pete region.
