Three Things to Watch
- The labor markets will be in focus this week with multiple readings culminating in Friday’s employment report for September. The Job Openings and Labor Turnover, or JOLTS, data on job openings is out on Tuesday, followed by jobless claims and Challenger job cuts on Thursday. On Friday, nonfarm payrolls are expected up a weak 50,000, with the unemployment rate steady at 4.3%. With the U.S. Federal Reserve’s concern over the labor markets, a consensus number will weigh in favor of additional cuts to the federal funds rate sooner rather than later.
- Other economic data released includes the Institute for Supply Management surveys (manufacturing and services) and consumer confidence. Manufacturing is expected to contract, while services have rebounded from a weak reading in May. Confidence continues to rebound from the April lows, led by better future expectations.
- In addition to the economic data, earnings continue to roll in with this week featuring reports from Carnival Corp., Paychex, and the world’s largest shoe company, Nike.
Three Things to Know
- Currently, 22% of mortgages in the United States have rates higher than 6%, the highest in 12 years. This percentage is six times higher than it was in 2022. At the same time, 30% of mortgages carry rates between 3% and 4%, the lowest in a decade. Additionally, 23% of mortgages have rates below 3%, the lowest percentage since 2021. Meanwhile, the 30-year average mortgage rate has declined 0.50 percentage points over the last four months, to 6.3%, near its lowest since October 2024. (Source: The Kobeissi Letter)
- World central banks have cut rates 168 times over the last 12 months, the third-highest reading this century. The previous cycle peak was 196 cumulative 12-month rate reductions in June 2020. By comparison, following the 2008 Financial Crisis, global central banks cut rates as many as 249 times in the 12 months ending October 2009. (Source: The Kobeissi Letter)
- Fed funds futures are currently pricing in one to two more 25-basis-point cuts this calendar year, with the odds slightly higher for two additional decreases. (Source: Bloomberg, BFE)
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.