As mortgage rates climb to 8%, existing home sales in the US dropped below four million in September for the first time since October 2010. On a year-over-year (y/y) basis, sales were down 15.4%, representing the 16th straight month of double-digit declines, just four months shy of the record 20-month streak ending in August 2008.

Indecision

In the five trading days spanning October 10 to 16, less than 0.2% separated the S&P 500’s intraday high each day, the narrowest such range in six years. Since 1982, when intraday data began, the S&P 500’s median forward three-month return after other periods when the spread was as narrow or narrower was a gain of 4.1% with gains 72% of the time.

Source: Bespoke

T.G.I. Monday

Monday, October 16th, was the 15th consecutive Monday that the S&P 500 closed higher on the day. Since 1952 (when the five-trading day week started), there has never been a longer streak of Monday gains, and only two other streaks have cracked double-digits (11 weeks ending 6/13/05 and 10 weeks ending 7/6/20).

Source: Bespoke

Better Day For Chips?

From its closing high on 7/31 through 10/18, the Philadelphia Semiconductor Index (SOX) declined by 11.6%, or nearly twice the decline of the S&P 500. In its earnings report on 10/18, though, the CEO of Taiwan Semiconductor (TSM), the second largest component of the SOX, commented that he is seeing signs of a recovery in smartphones and PCs while AI has become a significant tailwind.

Source: Bloomberg

Eight is Not Great

The national average rate on a 30-year fixed mortgage reached 8% on 10/18 for the first time since June 2000. The current 3.1 percentage point spread between the 30-year fixed mortgage rate and the 10-year Treasury yield ranks in the 97th percentile of all periods in the last 25 years.

Source: Bankrate.com

Who Said Bonds Are Boring?

Over the last 200 trading days, the average daily change of the SPDR S&P 500 ETF (SPY) has been a gain or loss of 0.67%, while the iShares 20+ Year US Treasury ETF’s (TLT) average daily move has been +/-0.91%. Since TLT’s inception in 2022, there have only been ten other trading days — all in August 2015 — where its volatility relative to SPY was greater.

Source: Bespoke

Help Wanted (For a Downpayment)

According to a Redfin analysis, a homebuyer must earn $114,627 per year to afford the median-priced US home, which is about $40,000 more than the 2022 median household income of roughly $75,000. Because of sky-high housing costs, 38% of recent homebuyers under the age of 30 said they needed money from family to afford the down payment.

Source: Redfin

Strong Retail

September retail sales exceeded estimates for the third straight month with strength across most sectors. Relative to April, the six-month average number of sectors showing positive month-over-month (m/m) sales growth has experienced its most positive reversal in a five-month span since at least 1992.

Source: US Census Bureau

Diverging Jobless Claims

October’s report on weekly jobless claims showed that initial claims dropped to 198 K while continuing claims increased to 1.734 million. The decline in initial claims was the first sub-200 K reading since 1/27/23, but the increase in continuing claims took that reading to its highest level since 7/7/23.

Source: US Department of Labor

Youthful Thinking?

In the same LendingTree survey, 20% of Americans said they consider themselves “wealthy.” Of those that don’t consider themselves wealthy, 69% of Gen Z adults expect to be wealthy at some point in their lifetimes compared to just 31% of Gen Xers and 21% of Baby Boomers.

Source: Lending Tree

Flag-Pulling for Gold

Last week it was announced that flag football will be part of the 2028 Olympic Games in Los Angeles. This 5v5 version of American football
where a flag pull, instead of a tackle, results in a down has grown dramatically in recent years. Popularity on the women’s side has been especially strong where it’s now offered as a varsity high school sport in eight states

Source: NFL.com

Freight Recession

The US trucking industry remains oversupplied. FreightWaves estimates there are at least 63,000 more trucking companies in business today than the market needs, which is pushing down truckload rates. On its third quarter earnings conference call on 10/17/23, trucker JB Hunt (JBHT) mentioned the term “freight recession” twenty times.

Source: Freightwaves

 

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Past performance is no guarantee of future results. The Standard & Poor’s 500 Index is a market capitalization-weighted index of 500 widely held equity securities designed to measure broad US equity performance. It is not possible to invest in an index. InVestra does not provide legal, tax, or accounting advice. Clients of Investra should obtain their own independent tax and legal advice based on their particular circumstances. No forecasts can be guaranteed. Past performance is not a guarantee of future results. This has been provided for informational purposes only, and reflects the current opinion of the author which is subject to change without notice, as are statements of financial market trends, which are based on current market conditions.

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