Several items of note today, hence this odd update.
First is – as we told you to expect – Fed Chair Jay Powell is not rolling over on rates. In fact, in a speech today he went to far as to say:
The FOMC is strongly committed to bringing inflation down to 2 percent over time, and to keeping policy restrictive until we are confident that inflation is on a path to that objective. It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease. We are prepared to tighten policy further if it becomes appropriate to do so.
Totally in line with our expectations. Yet, the market has moved a bit higher and no telling when rational will come a-knocking. Anymore, that rational stuff seems in short supply!
Two more items that will weigh.
First is in the Middle East where Israel is continuing to clean our Gaza, we are hearing now that Russia is sending Iran more advanced weapons systems – and that’s likely to embolden Iran which is likely to roll into leadership of an Islamic block attack on Israel in coming weeks. Serious problem for Israel: Iran with Su-35 and R-37M locks the Middle East – New “deal” for S-400 with Su-57 is coming.
And a note on Housing:
Construction spending during October 2023 was estimated at a seasonally adjusted annual rate of $2,027.1 billion, 0.6 percent (±1.0 percent)* above the revised September estimate of $2,014.7 billion. The October figure is 10.7 percent (±1.6 percent) above the October 2022 estimate of $1,830.5 billion. During the first ten months of this year, construction spending amounted to $1,646.0 billion, 5.6 percent (±1.2 percent)
above the $1,559.1 billion for the same period in 2022.
Back to watching how high traders will run this pig of a market with a Fed that is clearly skeptical of cutting too early, before inflation is put back in the box.
Write when you get rich,