Good Monday PM,

Apologies for a late start.

Bonds are bouncing against us today but no news that would have caused this bounce other than just people are used to what’s happening in Israel and it’s sad the way the market can digest this type of thing so quickly. More Fedspeak this am that thinks that we’re all done with rate increases. It should have helped bonds a little bit, but it hasn’t. The only news we got today was Empire State manufacturing that came in worse than expected and way worse than last month. There’s been a trend there and retail sales will be tomorrow and then we have housing started.

It’s a pretty light week, housing numbers and retail sales.

Just some snippets from around..

Economists are turning optimistic on the U.S. economy. They now think it will skirt a recession, the Federal Reserve is done raising interest rates and inflation will continue to ease. In the latest quarterly survey by The Wall Street Journal, business and academic economists lowered the probability of a recession within the next year, from 54% on average in July to a more optimistic 48%. That is the first time they have put the probability below 50% since the middle of last year.

Fueling the optimism are three key factors: inflation continuing to decline, a Federal Reserve that is done raising interest rates, and a robust labor market and economic growth that have outperformed expectations.

The highest mortgage rates in 23 years are dragging down home sales to their lowest levels since the subprime crisis period. Sales of previously owned homes in 2023 are expected to dwindle to a rate not seen since at least 2011, when the U.S. population was smaller and the country was still recovering from one of the worst housing crises ever. Chen Zhao, economics research lead at real-estate brokerage Redfin, estimated that total existing-home sales in 2023 would amount to around 4.1 million, which would mark the smallest number of sales since about 2008, the year that Lehman Brothers collapsed and sparked the global financial crisis.

Keeping it there for today.

Please remain safe and healthy!