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Levine Capital Weekly Newsletter – December 12, 2023

🎉 Welcome to Our Weekly Financial Expedition!

This week, we bring you the latest and most impactful financial updates, from the shifting tides of the housing market to the intriguing trends in jobless claims. Let’s delve into the key takeaways that matter to you!

🌡️ Inflation Trends: A Sigh of Relief

October’s Update: The Personal Consumption Expenditures (PCE) Index shows that headline inflation was stable for the month, with a year-over-year decrease from 3.4% to 3%. Even more promising, Core PCE, the Fed’s preferred measure, dropped to its lowest level in over two years.

What This Means: We’ve seen significant progress in curbing inflation since last year. The Fed’s rate hikes are showing their intended effect, and there’s a buzz that they might pause these hikes in their next meeting.

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🏠 Housing Market Dynamics: A Complex Picture

Pending Home Sales: There’s been a 1.5% decline from September to October, marking the lowest level since 2001. Limited inventory remains a major hurdle, with a significant impact on housing demand.

New Home Sales: Despite a 5.6% drop from September to October, the pace of new home sales remains strong compared to last year. The availability of new homes and median prices suggest a market adjusting to current economic conditions.

💹 Home Values: Resilient and Rising

The Case-Shiller Index and other valuation measures indicate continued appreciation in home prices. Despite some market fluctuations, home values have hit new all-time highs, presenting opportunities for wealth building through homeownership.

📊 Labor Market: Mixed Signals

Jobless Claims: Initial claims have slightly risen, but the real story lies in Continuing Claims hitting a 2-year high. This could signal a challenging environment for those seeking employment.

🔭 Looking Ahead:

Stay tuned for upcoming housing appreciation data from CoreLogic and crucial labor sector reports, including the ADP Employment Report and the Bureau of Labor Statistics’ Jobs Report.

📉 Technical Market Analysis:

Mortgage Bonds and the 10-year treasury yield continue to exhibit interesting trends and resistance levels, providing key insights for market participants.

Wrap-Up:

Our journey this week unveils a landscape of gradual inflation control, a complex housing market, and a labor sector sending mixed signals. As always, Levine Capital is here to navigate these developments with you.

Wishing you a week of insightful decisions and successful ventures with Levine Capital!