Good Thursday AM,

Quick recap from Dr. Elliott Eisenberg on yesterday’s retail sales numbers… I love accounting.

“While September M-o-M retail sales jumped a more than expected 0.7% and August sales were revised up from 0.6% to 0.8%, there is less here than meets the eye. After inflation, August sales were up 0.16% M-o-M and September was up 0.32%. Y-o-Y real retail September sales rose 0.06%, the first positive reading since January’s 1% rise. Retail sales have been dead flat at $230 billion/month for 30 months.”

Markets of course trade on headlines most often.. to all of our dismay for the moment.

Today, we had unemployment claims data which showed less claims than expected. Great if true for the economy, not so for lending. Home sales fell to the slowest pace in 13 years, the National Association of Realtors said, as high mortgage rates squeeze the market.

Additionally this a.m., Federal Reserve Chair Jerome Powell suggested that he is pleased with inflation’s decline this summer and that the central bank is unlikely to raise interest rates again unless it sees clear evidence that stronger economic activity jeopardizes such progress. “Given the uncertainties and risks, and how far we have come, the committee is proceeding carefully,” Powell said in prepared remarks for a Thursday lunchtime address in New York. “Incoming data over recent months show ongoing progress toward both” of the Fed’s goals to maintain stable inflation and strong employment. This should have greatly helped markets but has not. The 10yr note is unbelievably at 4.99%. not much else to share beyond that statement.

And a last comment on the supply/demand imbalance in the bond market which has caused rates to rise so dramatically. In addition to the Federal Reserve selling more bonds into a market that is straining to absorb them, Chinese investors offloaded the most US bonds and stocks in four years in August. The bulk of the $21.2 billion of sales were in Treasuries and US equities, with funds in the Asian nation also cutting holdings of agency debt, according to data from the US Department of the Treasury released on Wednesday.

Please remain safe and healthy, make today great!