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1. NAHB Housing Market Index. Homebuilder sentiment is at its lowest since January after an unexpected drop in October. It was the third straight monthly decline.
2. Affordability (or lack thereof). "A homebuyer must earn $114,627 to afford the median-priced U.S. home, up 15% ($15,285) from a year ago and up more than 50% since the start of the pandemic. That’s the highest annual income necessary to afford a home on record."
3. Global freight. "Global Ocean Container Rates have just hit a 5-year low."
4. Financial conditions. "The nominal GS US Financial Conditions Index eased by 9.4bp to 100.36 over the last week, mostly due to a lower 10 year Treasury yield."
5. Policy views. Among global fund managers (FMS) surveyed by BofA,"net 54% say monetary policy is too tight and fiscal policy too stimulative (the most on record)."
6. First Fed cut. "More than half of FMS respondents expect the 1st Fed rate cut to occur in H2’24...Rising share expect the 1st cut to occur after 2024."
7. Retail sales (I). "Headline retail sales soared 0.7% MoM (vs +0.3% exp). The previous two months were also revised higher (rising for 6 straight months), lifting retail sales up 3.8% YoY (the highest since Feb 2023)."
8. Retail sales (II). "Even when adjusted for inflation, the retail sales picture in September was positive."
9. Industrial & manufacturing production. “Industrial Production rose 0.3% MoM (SA)... but plunged 1.7% MoM (NSA). Manufacturing Output rose 0.35% MoM (SA)... but tumbled 0.5% MoM (NSA).”
10. Q3 GDP. The Atlanta Fed's GDPNow model estimate for Q3 GDP growth increased to 5.4% from 5.1% on October 10.
11. Commodity flows. "Over the week [ending Oct 13], global commodity markets absorbed inflows...of ~$16.4 billion WOW, bringing YTD cumulative inflows to $214 billion."
12. Corporate spreads. "US corporate bond markets, just like stocks, are shrugging off recent Mideast tensions ... Both think the Fed will see fresh geopolitical risk as a sign they should stand pat and adopt a more measured approach to rate policy."
13. Long-term rate outlook. "56% expect bond yields to be lower, the highest share of respondents on record (back to 2003)."
14. US 2-year. Yields on 2-year US Treasuries reached their highest since 2006.
15. FMS sentiment. "Our broadest measure of FMS sentiment, based on cash positions, equity allocation & economic growth expectations fell to 1.7 from 2.2."
16. Risk sentiment. Risk sentiment across indicators has deteriorated modestly over the past month.
17. FMS vs. stocks vs. bonds. "FMS equity allocation fell 1ppt MoM to net 4% underweight ...[while] bond allocation was up 2ppt MoM to net 1% overweight."
18. FMS cash levels. "FMS cash levels as % of AUM up from 4.9% to 5.3% in Oct, triggering 'buy' signal for BofA Global FMS Cash Rule."
19. Exposure plans. Among JPM clients, "44% plan to increase equity exposure, and 80% to increase duration near term."
20. Client flows. "11th straight week of BofA client inflows...Tech & Financials teaming up."
21. Most crowded. Long Big Tech is still considered the most crowded trade, albeit less so than last month.
22. October rotation. "In October, FMS investors rotated into energy, commodities, Japan, banks, and tech...and out of staples, EM, Eurozone, utilities."
23. EU to US rotation. "FMS investors rotated out of Eurozone equities into US equities in October at the fastest pace since Sep’22."
24. FMS positioning. FMS investors are bullish cash, Japan, tech, commodities, and energy. They are bearish UK, utilities, Eurozone, and real estate.
25. Small-cap discount. "Outside of the greatest excesses of the dot-com bubble in early 2000, smaller stocks have never traded at such a deep discount."
26. Earnings upgrades vs. downgrades. "Analysts’ earnings downgrades are increasingly outpacing upgrades."
27. Steady estimates. "On a quarter-by-quarter basis over the NTM, estimates have not moved since August, which is a notable departure from the last two reporting seasons."
28. FY EPS revisions. "Tech remains the primary driver of upward revisions."
29. Earnings dispersion. "Dispersion of estimates for [Big Tech] remains historically high even as revisions have leveled off. Meanwhile, estimate variability elsewhere in the S&P 500 has converged."
30. Profit expectations. And finally, “global profit expectations improve back to Aug’23 level... [the] least pessimistic outlook for profits since Feb’22.”
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