October Import prices were higher than expected

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Published Date 11/15/2024

Late yesterday afternoon, Fed chair Powell commented on several things but the market takeaway is focused on his comments that the Fed is in no hurry to lower rates, and it depends (as usual) on incoming data as well as the policies coming from the incoming administration. At 8 am ET the 10 year note -2 bps, MBS prices started +11 bps from yesterday’s close.

Data at 8:30 am: October retail sales expected +0.3% increased 0.4%, September sales revised from +0.4% to +0.8%, ex-vehicles expected +0.3% increased 0.1%, September revised from +0.5% to 1.0%. The consumer still spending, considered a positive sign although most spending is on essentials with some prices increasing. Sales increased the most at electronics & appliance stores (2.3%) and auto dealers (1.9%).

October import and export prices: imports thought to be -0.1% increased 0.3%; year/year +0.8% from -0.1% in September. Export prices in October increased 0.8% on +0.1% forecasts, year/year -0.1% from -2.1% in September, the price the highest since August 2023.

The Empire State manufacturing index that hasn’t moved much for a year, and when it does change it has mostly been flat; this morning the index was expected 0.0 from -11.9 in October, the index increased to 31.2. It isn’t a first-tier data point, nevertheless curious.

At 9:15 am October industrial production declined 0.3% after -0.3% in September; manufacturing production -0.5%; capacity utilization at 77.1% down from 77.5% and below 78% that was the norm for months; the decline likely due to the Boeing strike.

At 9:30 am the DJIA opened -160, NASDAQ -180, S&P -38. 10 year at 9:30 am 4.48% +4 bps. FNMA 6.0 30 year coupon at 9:30 am -13 bps and 23 bps lower than 9:30 am yesterday.

This morning the bellwether 10 year note is trading at its highest level in this recent increase in rates (4.49%). The more sensitive 2 year note hit a low at 3.55% in late September, today at 4.38%.

Source: TBWS

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Darren Orshoff is a Marketing and Real Estate professional, licensed Realtor with the California Department of Real Estate DRE#01803671 with WSR Real Estate DRE#01977642.  Darren is also a Certified Mortgage Planner, A Certified Financial Literacy Coach, A Dave Ramsey Trained Financial Coach, A Certified Mortgage Advisor, and while Darren is licensed by the NMLS, he is not originating loans but refers lending transactions to Golden Empire Mortgage, Inc. ("GEM") [NMLS ID No. 2427] licensed by the Department of Financial Protection and Innovation pursuant to the California Residential Mortgage Lending Act, for which he represents as the Corporate Marketing Coordinator.

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