Three Things to Know & Watch – 20 Sept, 2022

By Bill Hornbarger, Chief Investment Officer

 

Three Things to Watch

  • The Federal Reserve meeting is the biggest event this week. The focus will be on the language in the press release and if there are any clues as to when the Fed might begin to taper its bond purchases. The consensus appears to be that the Fed will begin to reduce the amount purchased each month (currently $120 billion) prior to year-end.
  • Washington will again be in focus with Congress expected to vote on the debt ceiling this week and the bipartisan infrastructure deal on Sept. 27. Much uncertainty remains on both the infrastructure bill and the proposed $3.6 trillion reconciliation measure attached to it.
  • Economic data out this week includes housing data (existing and new home sales and housing starts) and the leading economic indicators. The leading index is expected to be up for the 15th time in the last 16 months. The housing data has turned more mixed with the share of people who think now is a good time to buy a home falling in September to 29%, extending the plunge from March when the proportion was more than twice as high, data from the University of Michigan consumer sentiment survey showed last week. Despite low borrowing costs, inventory remains low and prices have risen approximately 20% from a year ago.

Three Things to Know

  • Social Security’s annual cost-of-living adjustment for 2022 could be the highest it’s been in years. Based on the latest consumer price index data, beneficiaries could see a 6.2% boost next year. The preliminary estimate is subject to change before next year’s adjustment is officially calculated. (Source: CNBC)
  • The median sales price for an existing single-family home exceeded $300,000 for the first time last summer and has continued to climb. In July it was $367,000, down slightly from June’s record of $370,100 and more than double the $171,000 10 years ago (July 2011). (Source: National Association of Realtors)
  • After peaking at $1,686 in May, lumber closed last week at $634 (random length lumber futures – contract specifies 110,000 board feet of random length softwood 2 x 4s). (Source: Bloomberg)

 

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.