U.S. Consumer Confidence Bounces Back in October
The Conference Board Consumer Confidence Index increased 3.6% to 113.8 (12.2% y/y) during October from 109.8 in September, revised from 109.3. The rise followed three months of decline. An October reading of 109.0 had been expected in the Action Economics Forecast Survey.
The Conference Board indicated that the rise in confidence occurred as “concerns about the spread of the Delta variant eased.” (…)
The jobs gap, representing the difference between respondents indicating that jobs are plentiful and those saying jobs are hard to get, rose to 45.0% from 43.5% in September, revised from 42.5%. This series has a 71% correlation with the unemployment rate over the last ten years. The jobs plentiful measure eased to 55.6% this month but remained near its record high. The jobs hard-to-get measure fell to 10.6%, the lowest level since June. These declines were countered by a rise in the jobs-not-so-plentiful reading to 33.8, its highest level since June. It remained down sharply, however, from the 2020 highs. (…)
The expected inflation rate in twelve months rose sharply to 7.0% from 6.5% in September and remained up from a 4.4% low in January of last year. The share of respondents planning to buy a new home within six months rose to 0.8%, the highest level since March. Those planning to buy a major appliance rose modestly to 49.0%. (…)
We will get September’s Personal Income and Outlays report this Friday. The Chase Card Spending Tracker suggests solid spending through October 18:
Even the goods component is hanging in at its pandemic-high levels:
Home-Price Growth Holds at Record in August Case-Shiller index rose 19.8% as demand remains robust despite rising prices pushing some buyers out of the market
(…) The Case-Shiller index, which measures repeat-sales data, reports on a two-month delay. In more recent weeks, the pace of home-priced gains has slowed. The median existing-home sales price in September rose 13.3% from a year earlier to $352,800, the National Association of Realtors said earlier this month. (…)
- Pricey Lumber Is Back Boosted by Supply Cuts, Labor Shortage The U.S. is also expected to double duties on a common Canadian wood next month, adding to costs.
On Tuesday, lumber futures were trading around $735.70 per 1,000 board feet in Chicago, more than double the pre-pandemic five-year average around $356. (…) “We’re seeing futures prices going back up, and that will undoubtedly mean the price of retail lumber builders buy goes up,” said Jerry Howard, chief executive officer of the National Association of Home Builders. (…)
The price surge earlier this year added as much as $40,000 to the price of the average U.S. house and forced some construction companies to stop building, according to the association. (…)
The subsequent drop in lumber prices had no impact on new house prices:
Copper prices are due to extend their decline next year from record levels touched in 2021 as mine supply ramps up and economic growth tapers in top market China, a Reuters poll found. (…) Analysts have revised their consensus forecast for the copper market balance next year to a surplus of 82,000 tonnes from a deficit of 100,000 tonnes in the July poll. (…)
Aluminium is the second best performing base metal on the LME, climbing nearly 50% so far this year and touching 13-year highs, fuelled by strong demand and production cutbacks in China due to power issues.
But tightness is due to ease next year, with the market deficit expected to more than halve next year to 396,000 tonnes from 893,000 tonnes in 2021, consensus forecasts show. (…) Analysts expect LME cash aluminium to average $2,695 a tonne next year, down 5% from the current price.
The price of nickel hit seven-year highs this month on concern about supply as inventories declined and demand boomed for stainless steel and electric vehicles.
Supply, however, is expected to surge next year from top producer Indonesia.
The global nickel market is forecast to flip from a 62,000-tonne deficit in 2021 to a 78,000-tonne surplus next year. (…) LME cash nickel is seen averaging $18,375 a tonne in 2022, down 10% from Tuesday’s price.
- La Niña winter looms
(Data: NOAA; Map: Kavya Beheraj/Axios)
EARNINGS WATCH
We now have 144 reports in, an 82% beat rate and +13.3% surprise factor (heavily influenced by Financials as banks have been releasing loan-loss reserves).
Trailing EPS are now $195.25. Full year 2021e: $201.36. 2022e: $220.77.
China developers propose offshore debt maturity extension, restructuring to regulators – sources
(…) NDRC said in a statement late on Tuesday that the regulators have asked the unnamed companies in the meeting to optimise their foreign debt structures and proactively prepare for repayment of both principal and interest on their foreign bonds.
They told the foreign debt issuers to use funds for approved purposes and “jointly maintain their own reputations and the overall order of the market”. (…)