Good Tuesday AM,
No data today other than pending home sales which dropped yet again…
The housing market is certainly slowing quickly. The way to build some positive momentum is centered on lower rates which will be the catalyst for broad growth. The data is coming in weaker and will continue to show signs of stress. I am hopeful the Fed holds off on any more negative rhetoric.
The banking sector is again under pressure with S&P now dropping the ratings on several banks.
Between banks having to pay more to chase depositors, having outsized exposure to commercial real estate loans, and credit card and auto loans seeing higher defaults, banking is having and is going to have some real head winds. Another broken banking system is not what the economy needs (although it would be a big help to interest rates). The meeting in Jackson Hole starts tomorrow. We will see what news we get from it. Some data on Thursday to watch with Durable Goods and Unemployment numbers. Friday is Chairman Powell’s speech which will drive markets. Play defense.. Lock early at this point.
On the topic of a slowing economy:
Pay for new hires is starting to shrivel after years of hefty salary bumps, requiring workers to reset what financial gains to expect from switching to a new job. Wages, especially for people who changed jobs, climbed in recent years as companies competed for workers to fill pandemic-induced labor shortages. Now, as the job market cools and businesses become more cautious in their hiring, many companies are paying new recruits less than they did just months ago. Among postings for more than 20,000 job titles on ZipRecruiter’s site this year, the average pay for most roles has declined from last year. Some of the steepest drops have been in technology, transportation and other sectors that experienced frenzied hiring sprees in 2021 and early 2022.
Please remain safe and stay healthy, make today great!