Weekly Market Commentary October 16th to October 20th 2023

Retails Sales in September bested expectations at 0.7% versus a forecast of 0.3%. August figures were revised higher as well, showing a resilient consumer, willing to spend at non-store and other miscellaneous retailers, restaurants and motor vehicle dealers. Spending rose on gasoline as well, primarily due to higher prices rather than increased demand. Strong personal consumption estimates factored into an increase in Q3 GDP estimates by the Atlanta Fed to a lofty 5.4%.

Existing Home Sales fell in September to the lowest rate in 13 years. Higher mortgage rates, limited supply and sticky high prices (rising over the last three months) were all factors in the slump. Sales for the month were 15% lower than a year ago. Housing Starts recovered 7% in the month but were below expected levels. New Building Permits declined by 4%, marginally better than forecasted.

Equity markets vacillated along with Fed speak and geopolitical strife this week. The S&P 500 closed lower by 2.4%. The Nasdaq Composite pulled back by -3.2% during the risk-off period. The 10-Year U.S. Treasury yield went on another upward tear on it’s way to 5% for the first time since 2007, closing the final trading session at 4.92%.

Key economic releases next week include New Home Sales, Durable Goods and Personal Income and Outlays.