US consumer confidence fell in October by more than expected to a three-month low as widespread inflation and growing concerns about the economic outlook weighed on Americans. The Conference Board’s index decreased to 102 from a 108 reading in September. The pullback in confidence underscores how high prices across the economy and growing concerns that aggressive interest-rate hikes by the Federal Reserve will tip the US into recession are weighing on consumers.

Shares of Google parent Alphabet are lower after the company reported an earnings miss on both the top and bottom line, as YouTube ad revenue drops in the quarter.  This was the weakest period for growth at Google since 2013 as there has been a large drop in online ad spending.

Share of Microsoft are lower after the company posted a 14% decline in profits in the most recent quarter.  The company cited declines in PC sales for most of their decline.

General Motors shares rallied 4.5% after the automaker reported a better-than-expected third-quarter profit, helped by rebounding sales. GM also said supply chain constraints are easing, allowing it to increase inventories on dealer lots.

How many times has the word "inflation" been mentioned by company executives this earnings season? On around 2 out of 3 conference calls, according to a transcript analysis by FactSet. The pressures have been on full display on both the producer and consumer sides of the equation, showing that companies have a lot more to think about when determining pricing and products. So far, around 20% of companies in the S&P 500 have reported Q3 results in the first two weeks of earnings season. Another 165 firms, representing around a third of the benchmark index, will issue their quarterly report cards this week.

Home prices are still higher than they were a year ago, but gains are shrinking at the fastest pace on record, according to one key metric, as the housing market struggles under sharply higher interest rates. Prices in August were 13% higher nationally compared with August 2021, according to the S&P CoreLogic Case-Shiller Home Price Index. That is down from a 15.6% annual gain in the previous month. The 2.6% difference in those monthly comparisons is the largest in the history of the index, which was launched in 1987, meaning price gains are decelerating at a record pace.

United Parcel Service reported mixed third quarter results Tuesday morning, posting earnings that beat analyst expectations and revenue that fell short of predictions. The company said softening demand globally hurt volumes, which was partially offset by higher pricing driven by inflation. UPS also reaffirmed its outlook for full-year revenue of $102 billion

The stakes this week couldn't be higher as Big Tech gets ready to dominate earnings season. While third quarter reports will pour in from every corner of the market, results from Microsoft, Alphabet, Meta, Apple, and Amazon are likely to define near-term market direction. Combined revenue growth of the megacaps is expected to have slowed to just under 10%, compared to a 29% increase in 2021 that took sales to $1.4T.

The IRS has raised the amount that Americans can set aside for retirement in their 401(k) and other tax-deferred plans next year. Beginning in 2023, workers will be allowed to contribute up to $22,500 to their 401(k), an increase of $2,000, or about 9.8% — the biggest jump since 2007, when the limit was $15,500. The IRS makes such cost-of-living adjustments annually, but in times of painfully high inflation, the increases are more significant and impactful for taxpayers.

China’s economy grew well below target in the last quarter, sending stock markets lower as the country enters a new political era following the appointment of President Xi Jinping to an unprecedented third term. The delayed release of gross domestic product data showed that the second-largest economy in the world grew by 3.9 per cent in the three months to the end of September compared with the same period last year. The announcement follows the conclusion of the Communist party’s 20th congress in Beijing over the weekend and the appointment of Xi to a third term in power, making him China’s most powerful leader since Mao Zedong.

The number of Americans filing first-time claims for unemployment benefits fell by 12,000 last week.  Claims totaled 214,000, down from the week before. Although the number reflects a labor market that remains tight, the Federal Reserve noted with the release of the minutes from their September meeting that conditions had eased somewhat. The unemployment rate stands at 3.5%, matching a record low, while there are more than 10 million positions open, or roughly 1.7 jobs for every available worker.

Existing homes are selling at the slowest pace since September 2012.  Sales of previously owned homes fell 1.5% in September from August to a seasonally adjusted annual rate of 4.7 million units, according to the National Association of Realtors.  That marked the eighth straight month of sales declines. Sales were lower by 24% year over year.  Sharply higher mortgage rates are causing an abrupt slowdown in the housing market. The average rate on the 30-year fixed home loan is now just over 7%, after starting this year around 3%. That is making an already pricey housing market even less affordable.

Taxpayers will get fatter standard deductions for 2023 and all seven federal income tax bracket levels will be revised upward as the government allows people to shield more of their money from taxation because of persistently high inflation.  For couples who file jointly for tax year 2023, the standard deduction increases to $27,700 up $1,800. Single taxpayers and married people filing separately will see their standard deduction rise to $13,850, up $900.

The U.S. housing market weakened again in September as the effect of the Federal Reserve's interest rate hikes bit increasingly hard.  The number of housing starts fell by 8.1% on the month to 1.4 million, reversing a surprise increase in August. They're now down 7.7% on the year. The slowdown has been particularly acute in the West, where the boom was most pronounced. Single-family housing starts are now down 30% from a year earlier.

Mortgage demand, which has suffered four straight months of declines, fell last week to the lowest level since 1997, as interest rates continued to rise.  Homebuyers’ demand for mortgages dropped 4% for the week and was 38% lower than the same week one year ago, according to the Mortgage Bankers Association. Applications to refinance a home loan fell 7% compared with the previous week. Demand was 86% lower than the same week one year ago.

Oregon recorded a small decline in employment in September, the first time the state has shed jobs in the past 12 months.  Statewide employment declined by 600 jobs last month, according to the Oregon Employment Department. That’s a minimal decline in a state of 2.2 million workers and within the margin that frequently disappears when economists revise their monthly figures.  Still, it suggests that the pace of Oregon job growth might finally be easing up. The state’s unemployment rate was 3.8% in September, near a historic low but up slightly from 3.7% the prior month.

Interest rates for the average 30-year mortgage resumed their upward trajectory after a slight drop the previous week, reaching their highest level since 2002, according to Freddie Mac.  The average rate for a 30-year fixed-rate mortgage increased to 6.92% for the week ending Oct. 13, according to Freddie Mac's Primary Mortgage Market Survey. This is an increase from the previous week when it averaged 6.66% and remains significantly higher than the previous year when it was 3.05%.

Bank of America reported better-than-expected earnings results, sending the stock up nearly 5%.  The Bank’s CEO Brian Moynihan said their consumers are financially resilient, despite high inflation and concerns the U.S. is nearing a recession.  The bank’s customers continue to spend freely, using their credit cards and other payment methods for 10% more transaction volumes in September and the first half of October than a year earlier.  Customers’ account balances remain higher than before the pandemic struck in early 2020, Moynihan said, indicating they were in a good position to continue spending.  Finally, consumer credit remains pristine, with late-payment metrics still well below pre-2020 averages, indicating that so far, customers had little difficulty keeping up with their debt.

The British pound rose on more policy reversals from the UK government.  New UK finance minister Jeremy Hunt announced that almost all planned tax cuts would be scrapped. The pound traded 2% higher at almost $1.14 per U.S. dollar.

US Stocks just came off their fourth negative week in five with a 1.6% loss last week. A hotter-than-expected inflation reading stoked wild price swings in the markets as investors readjusted their expectations for the Federal Reserve’s coming rate hikes.

The pace of sales at U.S. retailers was unchanged in September from August as rising prices for rent and food chipped away at money available for other things.  Retail sales were flat last month, down from 0.4% growth in August.  While the report showed the resilience of the American consumer, the figures are not adjusted for inflation unlike many other government reports. In fact, sales at grocery stores rose 0.4%, helped by rising prices in food.  Evidence that the Fed’s fight to cool the economy may be taking hold can also be seen, particularly with big-ticket items.

After two years of port congestions and container shortages, disruptions are now easing as Chinese exports slow in light of waning demand from Western economies and softer global economic conditions. Container freight rates, which soared to record prices at the height of the pandemic, have been falling rapidly and container shipments on routes between Asia and the U.S. have also plunged.  The latest Drewry composite World Container Index — a key benchmark for container prices — is $3,689 per 40-foot container. That’s 64% lower than the same time last September after falling 32 weeks in a row.

You’d have to go back to March 2020, in the early days of the Covid pandemic, to find a trading session more volatile than yesterday’s. The extreme rebound in stocks left Wall Street veterans struggling to explain exactly what happened. It was one of those trading days where if you had the news in advance (above-expected C.P.I.), you REALLY would have lost a lot of money.  The Sp500 jumped by about 5% from its early-session low. 

Kroger agreed this morning to buy Albertsons for about $24.6 billion, including debt, creating a grocery goliath with revenues of more than $200 billion. News of the deal, one of the biggest ever in the retail sector, took industry insiders by surprise given the intense amount of regulatory scrutiny it is likely to generate. Core inflation is soaring, with food prices a particular culprit. The Biden administration last year vowed to step up regulatory oversight of segments of the food chain, starting with meatpackers, where corporate concentration is believed to be keeping profits and retail prices high.

UnitedHealth Group reported moderately stronger-than-expected earnings this morning, sending shares higher. Revenue for the quarter was $80.9 billion, in line with expectations. . The company raised its guidance for the full 2022 fiscal year.

Sisters-based Laird Superfood, Inc. announced Wednesday it has entered into a co-packer agreement to outsource the manufacturing of its powdered creamers and hydration products, meaning it will be closing its Sisters manufacturing operations by the end of the year. he company received a takeover offer of $3 a share in August from investment bank EF Hutton, a week after announcing a first-half net loss of $19 million. The company’s valuation has plummeted 95% from its original $185mm valuation.  The share price dropped from $57 per share last December to $1.70 at the end of trade Wednesday.

Prices consumers pay for a wide variety of goods and services rose more than expected in September as inflation pressures continued to weigh on the U.S. economy. The consumer price index for the month increased 0.4% for the month, more than estimates, according to the Bureau of Labor Statistics. On a 12-month basis, so-called headline inflation was up 8.2%, off its peak around 9% in June but still hovering near the highest levels since the early 1980s.

Amid record high inflation, Social Security beneficiaries will get an 8.7% increase to their benefits in 2023, the highest increase in 40 years. The Social Security Administration announced the change on Thursday. It will result in a benefit increase of more than $140 more per month on average starting in January.

Cleveland Fed President Loretta Mester said yesterday that the Fed has more hikes to go before the fed funds rate becomes restrictive, even at the expense of growth. "With growth well below trend over the next couple of years, it is possible that a shock could push the U.S. economy into recession for a time," she said. The market is still pricing in more than an 80% chance that the FOMC boosts rates by another 75 basis points in November.

Shares in the largest gig economy companies tumbled yesterday after the Biden administration proposed a new rule that would make it more likely that gig workers will be classified as employees instead of independent contractors. Uber fell as much as 16.7 per cent, while shares in rival Lyft and food delivery service DoorDash hit record lows as investors worried the Labor Department’s proposal would dramatically raise wage costs. The proposal would establish a “test” that the Labor Department could use to determine if workers are employees or independent contractors based on how much control they have over their hours and their job responsibilities.

Wholesale prices rose more than expected in September despite Federal Reserve efforts to control inflation, according to a report Wednesday from the Bureau of Labor Statistics. The producer price index, a measure of prices that U.S. businesses get for the goods and services they produce, increased 0.4% for the month. On a 12-month basis, PPI rose 8.5%, which was a slight deceleration from the 8.7% in August.

JPMorgan Chase CEO Jamie Dimon said that current economic conditions will likely push the U.S. into a recession in the next six to nine months, amid "very serious" headwinds like inflation, rising interest rates, quantitative tightening and the war in Ukraine. Speaking to CNBC, the head of JPMorgan also warned that markets could become "disorderly" as volatility increases in the face of a fast-changing economic situation. Looking at near-term circumstances, Dimon said the current economy was still doing well but faced significant headwinds that he thinks have already pushed Europe into a downturn.

Realtors, mortgage brokers, and appraisers across the US are bracing for widespread job cuts as home sales plummet amid rising interest rates. For those who work in and around the housing market, the effect of aggressive moves by the Federal Reserve to reduce inflation has been swift and severe. Realtors, mortgage brokers, appraisers, and construction groups say they have lost as much as 80 per cent of their revenue since the Fed started raising rates in March. A record 1.5mn Americans worked as real estate agents during the height of the market last year. Some 156,000 people joined the National Association of Realtors in 2020 and 2021 alone. That is 60 per cent more than in the two years before.

The International Monetary Fund predicts global growth will slow to 2.7% in 2023.The worst is yet to come, and for many people 2023 will feel like a recession the report reads. Its GDP estimate for this year remained steady at 3.2%, which was down from the 6% seen in 2021.
 

There’s a busy week ahead: The Q3 earnings season comes charging in with companies like Citigroup, Delta Air Lines, Domino's Pizza, JPMorgan Chase, Morgan Stanley, PepsiCo, and UnitedHealth all set to report. The economic calendar is also busy with updates on the NFIB small-business index, initial and continuing jobless claims, retail sales data, and consumer sentiment - although the primary focus will be on hot reads on inflation with the producer prices report and consumer prices report due in. Third-quarter S&P 500 earnings growth is now expected to be 2.6%, down from 9.8% in July.

Banks led by Morgan Stanley may lose about $500M in their effort to fund Elon Musk's $44 billion purchase of Twitter as the debt markets have seized in recent months. Lenders including Morgan Stanley, Bank of America, and Barclays originally committed $13B of debt financing for the transaction. Those banks will take a haircut if they had to sell the debt now, according to Bloomberg calculations. They originally agreed to fund the purchase even if they couldn't sell the debt and its now significantly less marketable in the current environment.

Shares in top Chinese chipmakers shed $8.6bn in market value on Monday, as new US export controls threatened to obstruct Beijing’s plans for technological self-sufficiency. The sharp losses came after Washington unveiled new export controls on Friday that restrict the sale of semiconductors made with US technology unless vendors obtain an export license.

Job growth fell just short of expectations in September and the unemployment rate declined despite efforts by the Federal Reserve to slow the economy, according to the Labor Department.  Nonfarm payrolls increased 263,000 for the month, compared to the Dow Jones estimate of 275,000.  The unemployment rate was 3.5% vs the forecast of 3.7% as the labor force participation rate edged lower and the size of the labor force decreased by 57,000.

Renter protections from Oregon’s pandemic-era emergency rent assistance program expired Friday, eliminating the last renter safety net policies tied to the economic fallout from the pandemic.  Landlords can now resume a three-day or six-day eviction notice. And they can now evict tenants for back rent they didn’t pay during the pandemic.

Average long-term U.S. mortgage rates ticked down modestly this week after six straight weeks of gains pushed rates to heights not seen in more than a decade, before a crash in the housing market triggered the Great Recession in 2008.  Mortgage buyer Freddie Mac reported that the average on the key 30-year rate dipped to 6.66% from 6.70% last week. One year ago, the rate stood at 2.99%.  The average rate on 15-year, fixed-rate mortgages, popular among those looking to refinance their homes, came down to 5.9% from 5.96% last week.

A group of some of the world’s most powerful oil producers agreed to impose deep output cuts, seeking to spur a recovery in crude prices despite calls from the U.S. to pump more to help the global economy.  OPEC and non-OPEC allies, a group often referred to as OPEC+, decided at their first face-to-face gathering in Vienna since 2020 to reduce production by 2 million barrels per day starting in November. The move represents a major reversal in production policy for the alliance, which slashed output by a record 10 million barrels per day in early 2020 when demand plummeted due to the Pandemic. 

In a KPMG survey over 50% of CEO’s in the US say they are considering cutting jobs in the next 6 months.  In their global survey 8 out of 10 are considering cuts.  Within the survey the C suite was clear that remote workers would be the first to go.  If you are a remote worker you may find it in your best interest to show your face in the office as job security becomes more uncertain.

Applications for US unemployment insurance rose by more than forecast last week, though remained at a historically low level.  Initial unemployment claims increased by 29,000 to 219,000 in the week ended Oct. 1, according to the Labor.  The rise in claims was just the third increase since the end of July.

The U.S. labor market showed strength in September, with private companies adding more jobs than expected, according to the payroll services firm ADP.  Businesses added 208,000 for the month, better than the 200,000 Dow Jones estimate and ahead of the upwardly revised 185,000 in August.  Those gains came even as goods-producing industries reported a loss of 29,000 positions, with manufacturing down 13,000 and natural resources and mining losing 16,000.

Elon Musk sent a proposal to Twitter saying that he is willing to go forward with his acquisition of the company at the original price of $44 billion, according to a letter from Musk’s lawyer filed with the SEC.  The news sent Twitter's shares up as much as 22%.

U.S. job openings fell by the most in nearly 2-1/2 years in August, though staying at high levels as demand for labor remains fairly strong, which could keep the Federal Reserve on its aggressive monetary policy tightening path.  Job openings, a measure of labor demand, dropped 1.1 million to 10.1 million on the last day of August, according to the Labor Department.  August's decline was the largest since April 2020, when the economy was reeling from the first wave of the pandemic.

U.S. manufacturing activity grew at its slowest pace in nearly 2-1/2 years in September as new orders contracted amid aggressive interest rate increases from the Federal Reserve to cool demand and tame inflation.  The Institute for Supply Management (ISM) showed a measure of factory employment contracted last month for the fourth time this year.  Companies are now managing head counts through hiring freezes and attrition to lower levels, with medium- and long-term demand more uncertain.

U.S. construction spending fell by the most in 1-1/2 years in August, pulled down by a sharp decline in outlays on single-family homebuilding amid surging mortgage rates.  The Commerce Department said that construction spending dropped 0.7% in August, the largest decline since February 2021, after decreasing 0.6% in July.

Shares of Tesla traded lower after the world's most valuable automaker sold fewer-than-expected vehicles in the third quarter as deliveries lagged way behind production due to logistic hurdles.  Shares opened at a more than two-month low which means Tesla has lost nearly $58 billion in market capitalization in a single day, more than the market value of General Motors Co as well as Ford Motor Co.

Wall Street closed out a miserable September on Friday with the S&P 500′s worst monthly skid since March 2020, when the pandemic crashed global markets.  The benchmark S&P 500 index ended the month with a 9.3% loss and posted its third straight losing quarter. It’s now at its lowest level since November 2020 and is down by more than a quarter since the start of the year.

Consumer sentiment rose in September to a final reading of 58.6 amid falling gas prices, though Americans remain broadly pessimistic about the economic outlook. The University of Michigan index advanced from 58.2 in August but fell from an initial 59.5 print earlier this month. Consumer expectations for inflation over the next year hit a one-year low of 4.7%, while expectations for inflation over the next five years declined to 2.7% from 2.8% in August, its lowest level since July 2021

U.S. consumer spending increased more than expected in August, but stubbornly high inflation is dampening demand, potentially limiting an anticipated rebound in economic growth this quarter.  The report from the Commerce Department also showed underlying inflation pressures building up last month, providing cover for the Federal Reserve to remain on its aggressive monetary policy tightening path.