Markets: They were really volatile last week. And basically moved sideways.
The S&P roller coaster last week: down significantly, down a touch, up a lot, up a lot, and up a touch.
Fed meeting: The focus of the FOMC meeting (the sixth of the year… they meet twice/quarter) was to separate the timelines on their two major tools. The US economy isn’t in a crisis or an emergency at this point and it’s getting difficult for the Fed to justify emergency actions. The timeline for starting to move their interest rate off zero (0.00% to 0.25%) appears to be a year away. The expectation is the two years from now their rate will be about 1%. The more immediate clarification came on their Asset Purchases (Shazam money). Expectations are they will announce their tapering schedule at their meeting in early November. The Fed will drop from $120 billion/month in debt purchases down to $0/month by next summer. The Fed’s balance sheet has doubled over the last 18 months and is now near $8.5 Trillion. It will be closer to $9 Trillion by next summer.
Housing: Starts were up about +4% in August and are up +17% YOY. Existing home sales were down -2% in August and are down -1.5% YOY. New home sales were up +1.5% in August and are down -24% YOY.
Jobless claims: The weekly number came in at 351,000. Some perspective: last year we were talking millions per week. In March we averaged 728,000; June we averaged just below 400,000; and for September thus far we are averaging 333,000. The old normal was around 200,000 per week. Maybe post-Covid the new normal is around 300,000.
Radio: Bill and I chatted about the Fed meeting. Here’s the link: https://parker-wealth.com/bill-and-chris-podcasts/bill-and-chris-fri-9-24. You can normally hear us most Fridays at 6:38a, 7:38a, and 8:38a on 1100AM.
Sports: What a weekend. Congrats to the USA Ryder Cup team for a dominate win. Congrats to Lewis Hamilton on being the first driver to win 100 Formula 1 races (2nd all-time is 91 wins, 3rd all-time is 53). And of course, to the Browns and Ohio State.
Focus of the week: Because we’re so focused on the Federal Reserve, the most important update this week will come on Friday morning. That’s when we get the PCE numbers, the metric the Fed focuses on for inflation.
Indicator focus: Durable goods (Mon); international trade (Tue); Q2 GDP final, jobless claims (Thu); ISM manufacturing index, and the PCE update (Fri).