Rover's Weekly Market Brief - 10/20/2023

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Economy

The Commerce Department reported advance U.S. retail and food services sales increased (+0.7%) to $704.9B in September, this follows an upwardly revised (+0.8%) increase for August. This marks the sixth consecutive monthly increase. Retail sales are up (+3.8%) year over year. Total sales for July 2023 through August 2023 were up (+3.1%) year over year. Retail sales are mostly goods and are not adjusted for inflation, the strong headline reading shows consumer spending outpacing inflation. Spending on autos and parts increased (+1.0%) in September. Excluding auto sales, retail sales were up (+0.6%). Increases in retail sales were broad-based with miscellaneous store retailers (+3.0%), internet retail (+1.1%), gas stations (+0.9%), restaurants & bars (+0.9%), personal care (+0.8%), general merchandise (+0.4%), and grocery stores (+0.4%). Electronics & appliances (-0.8%), clothing (-0.8%), and building materials (-0.2%) all saw declines. Core retail sales, a measurement that excludes spending on autos, gasoline, building materials, and food services increased (+0.6%) in September. August’s core retail sales were revised up to show sales increasing (+0.2%) instead of (+0.1%).

The U.S. Census Bureau reported new residential building permits were down (-4.4%) in September to a seasonally adjusted 1.473M, (-7.2%) below the September 2022 rate of 1.588M. This is the largest monthly decline since November 2022. Single-family permits were up (+1.8%) to 965K from a downwardly revised August figure of 948K. Regionally single-family permits were mixed with readings of Northeast (0.0%), West (0.0%), Midwest (-0.8%), and South (+3.1%). Permits for 2 to 4 units reported down (-16.9%), while 5 units or more were down (-14.0%). Privately-owned housing starts increased (+7.0%) to 1.358M, from a downwardly revised August estimate of 1.269M, and (-7.2%) below the September 2022 rate of 1.463M. Single-family starts were up (+3.2%) to 963K as single-family homebuilding increased in the Midwest (+14.2%), West (+5.2%), and South (+2.8%), while the Northeast dropped (-19.0%). Housing starts for 5 units or more increased (+17.1%) to 383K in September, down (-31.5%) year over year. Privately-owned housing completions reported at 1.453M, up (+6.6%) from August’s downwardly revised 1.363M reading, and up (+1.0%) over September 2022. Single-family housing completions reported in at 998K, a (+5.3%) increase from the August’s downwardly revised rate of 948K, down (-4.8%) from September 2022.

The National Association of Realtors reported that sales of existing homes fell 2.0% in September to a seasonally-adjusted annual rate of 3.96M, down (-15.4%) as compared to September 2022. “As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales. The Federal Reserve simply cannot keep raising interest rates in light of softening inflation and weakening job gains.” said NAR Chief Economist Lawrence Yun. Sales of single-family homes slid (-1.9%) to a 3.53M annual rate (-15.8% Y/Y) and existing condo dropped (-2.3%) to a 430K annual rate (-12.2% Y/Y). Total housing inventory was up (+2.7%) at 1.13M (-8.1% Y/Y). Properties typically remained on the market for 21 days, down slightly from 20 days in August. Unsold inventory reported in at a 3.4-month run rate, slightly up from 3.3 months in August, and up from 3.2 months in September 2022. Sixty-Nine percent of homes sold in September were on the market for less than a month. The median sales price increased to $394,400 (+2.8% Y/Y). The median existing single-family home price was $399,200 (+2.5% Y/Y), while the median existing condo price was $353,800 (+6.8% Y/Y). All regions saw a decrease in sales from the previous year; led by the West (-19.3%), followed by the Midwest (-18.4%), Northeast (-16.7%) and South (-11.7%).

Upcoming Economic Reports:

Wednesday October 25 – New Home Sales (September)

Thursday October 26 – GDP (QoQ) (Q3)

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Brown & Brown (BRO)	Alphabet (GOOGL)	T-Mobile US (TMUS)	Amazon.com (AMZN)	Chevron (CVX)
Logitech International (LOGI)	Microsoft (MSFT)	Whirlpool (WHR)	Comcast (CMCSA)	Exxon Mobile (XOM)