Good Tuesday AM, I hope you’re having a spooktacular day..

Some data out today which was mostly bond friendly.

Employment cost index coming in a little lower than expected year over year. Chicago PMI lower than expected Consumer confidence lower than last month but not by much, Home Price indices all in higher. Market reaction is muted as it is also day 1 of the FOMC meeting. We will have a rate decision and commentary this time tomorrow. It will create volatility. I would not expect the Fed to hike but the commentary will move markets. Fingers and toes crossed it is a bit more dovish than it has been. Lots of additional data to digest the rest of the week. Enormous amount of employment information, construction spending, factory orders, etc.. we are going to be busy. Keep that in mind if you are deciding to float. The 10-yr is at 4.87% and right in the middle of the recent range.. bets are being hedged.

I found this piece from Bloomberg very interesting…

The Dallas Fed’s Texas Manufacturing Outlook Survey came out. The anecdotal comments, which are always vivid and colorful.

Unfortunately they were not good, by and large. While regional manufacturing surveys have been in the gutter for a while, I can’t remember a time when the commentary from survey respondents was this negative.

Here’s a sampling of quotes. Each one is from a regional manufacturer. The parenthetical indicates what industry the respondent comes from:

“We are seeing a pronounced slowdown in owners going forward with new projects. There is too much uncertainty in the economy and globally.” (Fabricated metal product manufacturing)

“Reduction in government grants, cash flow issues with customers and the uncertainty created by the lack of border controls [are issues affecting our business].” (Food manufacturing)

“Food service demand is soft. Retail (grocery) demand has remained steady. Our premium pet food business has fallen off significantly.” (Food manufacturing)

“Business has slowed down significantly; we see no signs of improvement in business activity.” (Machinery manufacturing)

“Six months from now is actually quite scary. The economy is uncertain, and customers cannot predict with any certainty what they see. Political pressure and the wars are now forcing customers to reevaluate their business activities and reduce their outlook. It’s very uncertain.” (Machinery manufacturing)

“Oh, how we long for the days of a stable market. We just lost another long-time customer to China where the pricing for the finished product was what we pay for the raw material. With the inflation we have being imposed on us here in the U.S., we won’t ever see those customers come back.” (Machinery manufacturing)

“In a consumer business, we are hearing a lot more “I can’t afford this” than we ever have before.” (Miscellaneous manufacturing)

“Activity is definitely slowing down. We remain optimistic at this point for a turnaround, but cautiously.” (Paper manufacturing)

“The economy is slowing.” (Primary metal manufacturing)

“We anticipate that business conditions will remain constant or decline over the next three to four months, based on the rate that we are receiving orders. Oil and gas orders have been weak all year, which is strange since oil prices have been high and are anticipated to continue to increase with the uncertainty in the world order.” (Primary metal manufacturing)

“We are currently forecasting a 20 percent drop in 2024 versus 2023 (previously planned for a 13 percent drop), so the market forecast has worsened month over month.” (Transportation equipment manufacturing)

“Order and sales volume have slightly increased month over month from September. We have seen longer delivery times and lead/wait times at the Los Angeles port, causing slight delays with inventory shipments. Overall uncertainty as to demand is high. The general consensus among other manufacturers/sellers is that demand/sales are weak, and no one is sure what the short-term future holds.” (Textile product mills)

It’s just one survey. And these are just anonymous comments. But they are definitely among the gloomiest set I’ve seen in a while. Also notable is that there’s not a single comment in the whole thing related to having a hard time finding workers, which says a lot about the normalization of the labor market.

He may be a genius but that doesn’t mean all decisions are right. X, the social media platform formerly known as Twitter, is now worth less than half of what Elon Musk paid for it a year ago. Restricted stock units awarded to employees value the business at $19 billion, according to a person familiar with the matter, compared with the $44 billion Musk paid for the company a year ago. Since the takeover was completed, a majority of Twitter staff have been laid off or have resigned, it was renamed X, it changed some content rules and it has seen more than half its advertising revenue disappear.

Please remain safe and healthy, make today great!