Weak October Markets Signal Further Dips; 2023 Inflection Presents Buying Opportunity
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Private domestic sector recorded a -$10B deficit in October, pointing to weaker markets in November. Fiscal impacts have a 1-month lag on markets.
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Federal government injected $76B, but $71B flowed out to foreign accounts, leaving $10B deficit. Bank credit fell $15B, resuming downward trend.
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October had large deferred federal tax payments, draining private sector liquidity. Historically causes market dips.
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Fiscal flows remain supportive into 2024, then decline sharply. Inflection point in late 2023/early 2024 is a good potential market entry time.
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Homebuilder and housing market indicators turning up again despite higher rates, showing adjustment to new normal. Credit creation growth likely to accelerate into 2027 peak.