US stock benchmarks rebounded after a tense week while the retreat in Treasuries extended as Wall Street debated the odds the Federal Reserve will raise interest rates again this year. The S&P 500 advanced 1.2% Friday with the benchmark snapping its four-week losing streak after a last minute deal with the autoworkers union helped buoy sentiment. (Bloomberg, October 5, 2023, https://www.bloomberg.com/news/articles/2023-10-05/stock-market-today-dow-s-p-live-updates?srnd=null)
Yields got another boost on Friday after bigger-than-expected surge in US payrolls that bolster the case for more Fed rate hikes. (Bloomberg, October 5, 2023, https://www.bloomberg.com/news/articles/2023-10-06/bond-market-yields-at-5-or-more-spell-pain-for-everyone?srnd=null)
The International Monetary Fund sees increasing odds that central banks can tame inflation without sending the global economy into recession, while warning the growth outlook remains uneven and weaker than before the pandemic. (Bloomberg, October 5, 2023, https://www.bloomberg.com/news/articles/2023-10-05/imf-sees-higher-odds-for-soft-landing-amid-uneven-global-growth?srnd=null)
Mortgage rates in the US rise for a fourth week, reaching 7.49%. Costs for 30-year loans are at highest level since late 2000. Rates, high prices have slammed affordability for homebuyers. (Bloomberg, October 5, 2023, https://www.bloomberg.com/news/articles/2023-10-05/mortgage-rates-in-the-us-rise-for-a-fourth-week-reaching-7-49?srnd=null)
US hiring surges, bolstering case for another Fed rate hike. Payrolls jumped 336,000 in September, topping all forecasts. Unemployment rate held at 3.8%, wages rose less than estimated. (Bloomberg, October 6, 2023, https://www.bloomberg.com/news/articles/2023-10-06/us-hiring-surges-bolstering-case-for-another-fed-rate-hike?srnd=null)
Fed will lean toward another rate hike after blowout payrolls. FOMC will have option to move again in November or December. Fed will be concerned about a reacceleration in the economy. (Bloomberg, October 6, 2023, https://www.bloomberg.com/news/articles/2023-10-06/surge-in-us-hiring-tilts-fed-toward-one-more-rate-hike-this-year?srnd=null)
US consumer borrowing unexpectedly declined in August by the most in more than three years, reflecting a record slump in non-revolving credit tied to student loan forgiveness by the Biden administration. Total credit decreased $15.6 billion, Federal Reserve data showed Friday. (Bloomberg, October 6, 2023, https://www.bloomberg.com/news/articles/2023-10-06/us-consumer-borrowing-drops-unexpectedly-on-non-revolving-credit?srnd=null)
Fading optimism on rates signals trouble ahead for $425 billion debt wall. Strong jobs report reinforces likelihood of higher for longer. No new junk bonds were launched in US as risk appetite falls. (Bloomberg, October 7, 2023, https://www.bloomberg.com/news/articles/2023-10-07/fading-optimism-on-rates-signals-trouble-ahead-for-425-billion-debt-wall?srnd=economics-v2)
Stock funds trudge into second half. The average U.S.-stock fund declined 3.9% in the third quarter. (Wall Street Journal, October 7, 2023, https://www.wsj.com/finance/stocks/stock-funds-third-quarter-results-2cd30bef?mod=finance_lead_pos5)