By Bill Hornbarger, Chief Investment OfficerPrint This Post
Three Things to Watch
- There are more than 20 different appearances by various Fed officials on the calendar this week, including two by Fed Chairman Jerome Powell. After last week’s interest rate hike and more hawkish rhetoric, the markets will pay close attention for insights on the economy, inflation and the path of monetary policy. The Fed indicated last week it expects rates to increase to above 4.5% at this point, higher than previously thought.
- The Fed’s favored measure of inflation, personal consumption expenditures (PCE), for the month of August will be released on Friday. The year-over-year rate is expected to decline to 6% after peaking at 6.8% in June. Core PCE (excluding food and energy) is expected to increase slightly to 4.7%. It peaked in February at 5.3% and has been slightly more volatile in recent months.
- Elsewhere, housing will be in focus with the release of the home price index and new and pending home sales. Housing activity has weakened noticeably in response to higher mortgage rates. Last week the national average for 30-year fixed rate mortgages hit 6.59% (per Bankrate) up from a low of 2.82% in early 2022.
Three Things to Know
- The market value of global bonds (as measured by the Bloomberg Barclays Global Aggregate Index) has fallen $12.3 trillion or 17.8% from its all-time high last summer. Source: Bloomberg
- Major market bottoms (as measured by the S&P 500) have occurred in October more than any other month. Since 1932, October leads with nine major market bottoms with March’s five ranking second. (Major lows defined as 18-month lows, and these have happened 27 times in the past nine decades). Source: Oppenheimer & Co. and Bloomberg
- The Conference Board’s Index of Leading Economic Indicators has been negative for six consecutive months. This development has a 100% accuracy rate in calling recessions since 1959. Source: Haver Analytics
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.