The number of US jobless claims fell to its lowest level in eight months last week, indicating that businesses are holding onto workers despite higher interest rates, but the number of continuing claims rose to its highest level in three months, suggesting that people already unemployed are struggling to find new jobs.
Federal Reserve Chair Jerome Powell has indicated that inflation is still too high and that reducing it to the Fed's target level may necessitate slower economic growth and a less robust job market.
Mortgage rates reaching 8% are causing a tighter supply of homes for sale, leading to increased demand and further deteriorating affordability, according to Morgan Stanley analysts who warn that if rates stay at this level, affordability would reach its most severe level in decades. Despite the unaffordability, the analysts predict that home prices will likely increase due to low supply and a lack of negative shocks to the broader economy.
Housing economists are urging the Federal Reserve to pause on raising rates due to concerns that elevated borrowing costs have made homes unaffordable, resulting in a decline in home sales and increased prices creating risks to economic growth.
Joseph Quinlan, the chief market strategist for Merrill and Private Bank, and Ariana Chiu, a wealth management analyst for Merrill and Private Bank, discuss their perspectives on market commentary and investment strategies in this article.
The income range for middle-class status in America is typically between $50,000 and $150,000 per year, although it can vary depending on location, and individuals can increase their income and achieve middle-class security through strategic job switching, enhancing their skill set, relocating to a region with a lower median income, or adding another earner or income stream to their household.
Mortgage rates in the US are continuing to rise, causing the housing market to cool and making it more difficult for Americans to afford homes.
Millennials and Gen Z consumers represent a valuable market, with brands using social media to target them and appeal to their purchasing power, according to a TD Cowen report. Surveys showed that value and cutting spending are important to these generations, with Amazon and Google playing significant roles in their path to purchase. The current economic environment has shifted consumer behavior towards seeking value, while sustainability remains a relevant factor, especially among younger consumers. However, higher interest rates, borrowing costs, and inflation are potential headwinds for these consumer groups.
Federal Reserve Chair Jerome H. Powell stated that the central bank may need to raise interest rates further if economic data continues to show strong growth or if the labor market stops cooling.
U.S. equities wavered amid concerns about the Federal Reserve's interest rate decisions, with Tesla shares plummeting due to falling demand and price cuts, while Netflix shares soared on increased subscribers and a price hike.
The average American household has a net worth of $1.06 million, but the median net worth is significantly lower at $192,900, highlighting the disparity between the wealthy and the typical American.
A coalition of groups is urging the Biden administration to withdraw a new rule proposed by the Consumer Financial Protection Bureau (CFPB) that would lower the cap on credit card late fees, arguing that it will harm consumers and economic growth. The groups claim that the rule will lead to higher costs for responsible consumers and reduce credit access for low-income workers.
Sales of previously occupied U.S. homes in September dropped to their slowest pace in over a decade due to surging mortgage rates and limited inventory, while home prices continue to rise.
The U.S. housing market is being negatively impacted by "Bidenomics," as mortgage rates reach their highest level since 2000, leading to a decrease in homebuyers and a limited number of homes on the market, while high inflation rates are making it difficult for Americans to afford basic necessities.
Mortgage rates rose to 7.63% in the week ending October 19, up from 7.57% the previous week, due to a strong economy and geopolitical uncertainty in the Middle East, according to data from Freddie Mac.
Federal Reserve Chair Jerome Powell indicated that the strength of the U.S. economy and tight labor markets could warrant further interest rate increases, countering market expectations that rate hikes had come to an end. Powell also acknowledged that inflation is still too high and further rate increases could be necessary.
According to Bank of America's Global Fund Manager Survey, 56 percent of investors believe that bond yields will fall over the next 12 months, with two potential paths being a soft landing or a hard landing for the Fed.
A $4 million marketing campaign titled "It All Starts Here" has been launched in San Francisco to promote the city's resilience and innovation ahead of the Asia-Pacific Economic Cooperation leaders' summit, as local business leaders aim to counter the negative image surrounding the city's current challenges.
South Africa has secured $676 million in grants from wealthy nations to support its transition to green energy, surpassing the initial commitment, but still a fraction of the total funding package that will need to be repaid with interest.
According to Allianz Chief Economic Advisor Mohamed El-Erian, the impact of higher Treasury yields and the Federal Reserve means freezing the housing market, higher borrowing costs for households and businesses, and a lack of stability in the bond market, urging for greater vision from the Fed as the U.S. economy faces points of inflection.
Chinese investors sold $21.2 billion in US assets, including Treasury bonds and stocks, in August, the largest amount in four years, as the onshore yuan weakened and speculation grew that Beijing was taking measures to support its currency.
Home sales in the US dropped in September to the lowest level in 13 years due to rising interest rates and climbing home prices, making it unaffordable for many potential buyers. The low inventory of homes for sale pushed prices up, with the median price for existing homes reaching a record high of $394,300 last month.
The US economy is expected to experience significant growth in the third quarter, despite a 0.7% decline in the leading economic index in September, with forecasts suggesting a GDP expansion of over 4%; however, analysts warn that the late stages of a business cycle may not provide clear indications of an imminent downturn.
The average mortgage interest rates for a 30-year fixed rate mortgage is 8.00%, for a 15-year fixed rate mortgage is 7.15%, and for a 5/1 adjustable rate mortgage is 6.88%.
The number of Americans applying for unemployment benefits fell to a nine-month low of 198,000, defying expectations of increased layoffs due to higher interest rates, indicating a stable economy with very low job losses.
The Philadelphia Federal Reserve's gauge of regional business activity remained in contractionary territory for the second consecutive month in October, but showed slight improvement with a 5 point increase, as the subcomponents of the index, including new orders and shipments, performed better than the overall headline.
Despite Javier Milei leading the polls and proposing dollarisation, Argentina's economic problems are deeply rooted in political issues and require more than just a quick fix.
Joe Biden takes a risky approach following a Gaza hospital explosion and Vladimir Putin plans to benefit from the Israel-Hamas conflict, while the Arab world holds different perspectives on the war.
Australia, the second-largest coal exporter in the world, is facing challenges in transitioning to clean power generation as it struggles to replace its aging coal plants with enough renewable energy sources, leading state governments to step in and prop up the ailing coal industry in order to avoid blackouts.
The ranks of India's ultra-rich are growing, with an increase of 216 fortunes of $120 million or more compared to last year, and the sources of affluence are shifting towards consumer goods, materials, and healthcare industries rather than traditional sectors like industry and finance. Additionally, the wealth distribution is becoming more diverse, with rich individuals residing in various cities across the country.
Federal Reserve Chair Jerome Powell's upcoming remarks at the Economic Club of New York may provide insight into the central bank's strategy on interest rates, potentially affecting the market and indicating if the Fed agrees with recent speakers who believe rate hikes are over.
India's illegal sports betting market receives around Rs 8,20,000 crore (USD 100 billion) annually, causing a loss of about Rs 2 lakh crore in tax revenue, with factors such as digital infrastructure growth and smartphone usage contributing to its expansion, according to a report by Think Change Forum (TCF). The report suggests strict implementation of the new GST regime and the establishment of a task force to monitor illegal offshore betting activities to restrict the growth of the illegal market.
The recent shift in consumer spending towards goods and away from services presents a good opportunity to buy retail stocks, as evidenced by the increase in insider buying at companies like Victoria's Secret (VSCO), Five Below (FIVE), and Crocs (CROX).
The Taliban administration wants to join China's 'Belt and Road' infrastructure initiative and will send a technical team to China for talks, signaling China's efforts to strengthen ties with the Taliban-run government.
The CEO of the federal high-frequency rail team, Martin Imbleau, has a pre-emptive plan to ensure reliable cost and timeline projections for the construction of new rail lines in Canada, aiming to connect Quebec City and Toronto with high-speed segments and potentially bypass Ottawa.
Chinese regional banks could face a capital shortfall of $301 billion due to the deepening local government debt crisis, caused by the property sector turmoil, with concerns rising over default risks from local government financing vehicles (LGFVs) as a result of the decline in the real estate market.
Warren Buffett's business partner Charlie Munger believes that people's discontent with the economy is a result of unrealistic expectations, and suggests that following their lead in investing in home builders, energy companies, and healthcare can improve financial prospects during tough economic times.
Bank of America's CEO Brian Moynihan predicts that rising interest rates and tightening lending conditions will lead to a slowdown in the U.S. economy, impacting consumer behavior and business decisions.
Argentina is facing a severe economic crisis with high inflation, dwindling foreign reserves, capital controls, and a looming recession, as voters prepare to choose between three presidential candidates in the upcoming election.
China's economic growth forecast for next year has been downgraded by the World Bank due to the ongoing slowdown in the country's real estate market, which is expected to put pressure on global growth.
China is using loans from its Belt and Road Initiative to promote the yuan internationally, increasing its share of global payments, although it still has a long way to go to challenge the dominance of the US dollar.
Kenya is seeing a surge in the export of skilled labor, particularly in technology and finance, as remittances reach $4.12 billion and the service sector becomes a major driver of economic growth and job creation, according to a World Bank report.
Global markets are anxiously monitoring rising tensions in the Middle East and the potential for the Israel-Hamas war to drive up oil prices and fuel inflation, leading to a sell-off in multiple markets, including Asia, Europe, and the US.
The Bank of England should have a 3% inflation target and the power to use negative interest rates in response to economic shocks, according to a leading thinktank. This would allow for a more effective and flexible response to future downturns, while also avoiding rising debt or austerity measures.
Medium-sized German companies, including fan and motor maker ebm-papst, are reducing their reliance on China and diversifying their markets in response to tensions between Beijing and Berlin, concerns over Western sanctions, and the potential for a Taiwan conflict to disrupt trade.
Mortgage rates in the US have reached their highest levels in over 20 years, with the average interest rate on a 30-year fixed rate home loan rising to 8%, as the Federal Reserve raises interest rates to combat inflation and demand for US government debt fluctuates. The increase in mortgage rates has already affected the housing market, with sales of existing homes down 15% compared to last year, although house prices have remained high due to strong demand.
Federal Reserve Chair Jerome Powell will deliver remarks in New York suggesting that interest rates will remain unchanged at the next meeting, despite uncertainty surrounding future rate decisions.
Pakistan's ability to generate dollar loans has decreased in the past two months, resulting in the depreciation of the local currency against the US dollar. In the first quarter of the current fiscal year, Pakistan secured $3.52 billion from multilateral and bilateral creditors, but commercial loans and international bonds have not been successful. The government must secure $14.1 billion in the remaining three quarters to maintain comfortable foreign exchange reserves and avoid a balance-of-payments crisis.
More Australians are returning to the office, particularly on Fridays, driven by social reasons and the desire to meet colleagues in person, according to a survey by the University of Sydney. The study also found a decrease in working from home, particularly on Thursdays and Fridays, and a corresponding increase in online shopping.
Pakistan needs to dispel four myths and adopt a reform agenda in order to access and leverage international climate finance through partnerships with the private sector and a focus on climate-smart development, as the global landscape has shifted towards lending and investments rather than grants.