The S&P 500 rallied on Wednesday after the Fed announced it may slow its rate hikes as soon as its next meeting. The index was only up one out of five days this week, but is down 14.6% YTD and is 15.1% below its record close.
With the Q3 GDP Second Estimate and the November close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 149.2%, down from 155.7% the previous quarter.
The yield on the 10-year note ended December 2, 2022 at 3.51%, the 2-year note ended at 4.28%, and the 30-year at 3.56%.
We've updated our periodic look at the Philly Fed ADS Index which includes Real Manufacturing and Trade Sales (for September 2022), Real Personal Income Less Transfer Payments (for October 2022), Initial Jobless Claims (for week ending in 11/26/2022), and Payroll Employment (for November 2022).
The BEA's Core Personal Consumption Expenditures Chain-type Price Index for October, released yesterday, shows that core inflation continues to be well above the Federal Reserve's 2% long-term target at 4.98%. The October Core Consumer Price Index release is currently higher, at 6.28%. The Fed is on record as using Core PCE data as its primary inflation gauge.
This morning's employment report for November showed a 263K increase in total nonfarm payrolls, which was above the Investing.com forecast of 200K jobs added. The unemployment rate remained at 3.7%.
Quick take: Based on the November S&P 500 average of daily closes, the Crestmont P/E is 118% above its arithmetic mean and at the 97th percentile of this fourteen-plus-decade monthly metric.
This morning the Institute for Supply Management published its monthly Manufacturing Report for November. The latest headline Purchasing Managers Index (PMI) was 49.0, down 1.2 from the previous month and in contraction territory. Today's headline number was below the Investing.com forecast of 49.8.
The November S&P Global US Manufacturing PMI™ came in at 47.7, down 2.7 from the final October figure and in contraction territory for the first time since June of 2020. S&P Global US Manufacturing PMI™ is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
With the release of this morning's report on October's Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal 0.68% month-over-month change in disposable income comes to 0.34% when we adjust for inflation. This is an increase from last month's 0.29% nominal and -0.06% real change. The year-over-year metrics are 2.52% nominal and -3.30% real.
The BEA's Personal Income and Outlays report for October was published this morning by the Bureau of Economic Analysis. The latest Headline PCE price index was up 0.34% month-over-month (MoM) and is up 6.02% year-over-year (YoY). Core PCE (YoY) is now at 4.98%, well above the Fed's 2% target rate.
Personal Income (excluding Transfer Receipts) in October rose 0.52% and is up 5.9% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was up 0.18%. The real number is down 0.1% year-over-year.
This morning's seasonally adjusted 225K new claims, down 16k from the previous week's revised figure, was better than the Investing.com forecast of 235K.
Valid until the market close on December 30, 2022.
The S&P 500 closed November with a monthly gain of 5.38% after a gain of 7.99% in October. At this point, after close on the last day of the month, three of five S&P 500 strategies are signaling "cash" — iShares Barclays 7-10 Year Treasury (IEF), Vanguard REIT Index ETF (VNQ), and Invesco DB Commodity Index Tracking (DBC) — down from from last month's quintuple "cash" signal. Both VTI and VEU are now signaling "invested".
Here's the latest on the largest cryptocurrencies by market share.
With yesterday morning's release of the September S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 1.2% decrease month over month. The non-seasonally adjusted national index saw a 11% YoY increase. The MoM is reduced to -2% after adjusting for inflation.
The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, dropped to 37.2 in October from 45.2 in September, which is in contraction territory. This is its third consecutive decline and its seventh monthly decline this year. Values above 50.0 indicate expanding manufacturing activity.
The latest JOLTS report (Job Openings and Labor Turnover Summary), with data through October, is now available.
The National Association of Realtors released the October data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales slid for the fifth consecutive month in October."
The Second Estimate for Q3 GDP, to one decimal, came in at 2.9% (2.93% to two decimal places), an increase from -0.6% (-0.58% to two decimal places) for the Q2 Third Estimate. Investing.com had a consensus of 2.7%.
As of November 28, the price of Regular and Premium were down 11 and 12 cents each, respectively, from the previous week. According to GasBuddy.com, Hawaii has the highest average price for Regular at $5.14 and Texas has the cheapest at $2.79. The WTIC end-of-day spot price closed at 77.24 and is down 3.5% from last week.
The headline number of 100.2 was a decrease of 2.0 from the final reading of 102.2 for October.
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for September. U.S. house prices were up 0.1% on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 11.0% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the index is down 0.13% in September and up 1.8% year-over-year (seasonally adjusted).
Six of eight indexes on our world watch list posted losses through November 28, 2022. The top performer is India's BSE SENSEX with a YTD gain of 7.30%. London's FTSE 100 is in second with a gain of 1.21%, and Tokyo's Nikkei 225 is in third with a loss of 2.18%. Coming in last is Hong Kong's Hang Seng with a loss of 26.07% YTD.
FINRA has released new data for margin debt, now available through October. The latest debt level is down 2.2% month-over-month.
Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. The latest average of the five for November is -8.9, down from the previous month.
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for November. The latest general business activity index came in at -14.4, down 5 from last month. All figures are seasonally adjusted.
The November Final Report came in at 56.8, down 3.1 (5.2%) from the October Final. Investing.com had forecast 55.0. Since its beginning in 1978, consumer sentiment is 34 percent below the average reading (arithmetic mean) and 33 percent below the geometric mean.
This morning's release of the October New Home Sales from the Census Bureau came in at 632K, up 7.5% month-over-month from a revised 588K in September. The Investing.com forecast was for 570K. The median home price is now at $493K.
The latest new orders number at 1% month-over-month (MoM) was better than the Investing.com 0.4% estimate. The series is up 10.% year-over-year (YoY). If we exclude transportation, "core" durable goods was up 0.5% MoM and up 4.9% YoY.
The Chicago Fed's National Activity Index, which we reported on yesterday, is based on 85 economic indicators drawn from four broad categories of data:
Fifth District manufacturing declined in November, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index is at -9 in November, up 1 from October.
The Chicago Fed National Activity Index (CFNAI) decreased to –0.05 in October from +0.17 in September. Three of the four broad categories of indicators used to construct the index made negative contributions in October, and three categories deteriorated from September. The index’s three-month moving average, CFNAI-MA3, moved down to +0.09 in October from +0.19 in September.
The latest Conference Board Leading Economic Index (LEI) for October was down 0.8% from the September final figure of 115.8.
This morning's release of the October Existing-Home Sales showed that sales fell to a seasonally adjusted annual rate of 4.43 million units from the previous month's 4.71 million. The Investing.com consensus was for 4.38 million. The latest number represents a 5.9% decrease from the previous month and its ninth in a row. October saw a 28.4% decrease YoY.
October's ZHVI came in at $357,589, up 0.1% from the previous month and up 13.5% YoY. After adjusting for inflation, the real figures are -0.5% MoM and 6.2% YoY.
The latest index came in at -6, up 1 from last month, indicating contraction in November. The future outlook inched up to 0. All figures are seasonally adjusted. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for October new residential housing starts. The latest reading of 1.425M was above the Investing.com forecast of 1.410M and is an 4.2% decrease from the previous month's 1.488M.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for October new residential building permits. The latest reading of 1.526M was down 2.4% from the September reading and is above the Investing.com forecast of 1.512M.
The latest Manufacturing Index came in at -19.4, down from last month's -8.7. The 3-month moving average came in at -8.6, down from last month. The Six-Month Outlook came in at -7.1, up from the previous month's -14.9. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion.
Month-over-month nominal sales in October were up 1.3% and up 8.2% YoY. Real Retail Sales, calculated with the seasonally adjusted Consumer Price Index, increased by 0.83% and was up 0.5% YoY.
The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook. The latest reading of 33 is down 5 from last month's 38.
This morning's report on Industrial Production for October shows a 0.1% decrease month-over-month, which was worse than the Investing.com consensus of 0.2%. The year-over-year change is at 3.28%, down from last month's YoY increase.
The Census Bureau's Advance Retail Sales Report for October was released this morning. Headline sales came in at 1.3% month-over-month and was above the Investing.com forecast of 1.0%. Core sales (ex Autos) also came in at 1.3% MoM.
The Consumer Price Index for Urban Consumers (CPI-U) released for October puts the year-over-year inflation rate at 7.75%. It is well above the 3.76% average since the end of the Second World War and above its 10-year moving average, now at 2.4%.
Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.
This morning's release of the October Producer Price Index (PPI) for Finished Goods was up 1.1% month-over-month seasonally adjusted, up from a 0.4% increase last month. It is at 11.2% year-over-year, down from a 11.5% increase last month, on a non-seasonally adjusted basis.
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 4.5 was an increase of 13.6 from the previous month's -4.5. The Investing.com forecast was for a reading of -5.0.
The latest full set UIG for October is 4.22% while the prices-only measure is 5.72%. Current Headline CPI is now 7.7% and Core CPI is 6.3%.
We are now seeing some of the highest inflation rates since the second of the two recessions in the early 1980s. Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past six months.