The major averages finish another strong week, posting solid numbers. The S&P 500 hits a new record, wrapping up its longest weekly winning streak this year. Since Monday the S&P 500is up 50 points or .86%, the NASDAQ advanced 147 points or .8% while the DOW gained 412 points or .96%.
Show Me The Money
With the 3rd quarter earnings season well underway the S&P 500 Index is on track for 7% earnings growth. Maybe a little more if were lucky. This would mark a fifth straight quarter of year over year earnings for the index. Solid numbers to be sure. On that note.
More Upward Economic Revisions
Positive economic revisions pushed the Atlanta Fed’s 3rd quarter GDPNow model up to 3.4%.
Led by a .4% jump in September retail sales and upward revisions to July and August. I’ll note that consumer spending, primarily retail sales. Makes up about 70% of total economic activity. On a historical note over the last 10 years. US GDP has averaged about 2% per year on a real or inflation adjusted basis. With 1st quarter GDP of 1.6%, 2nd quarter 3% and the 3rd quarter tracking 3.4%. 2024 is on track to produce well above average GDP. Solid numbers to be sure.
Another Baby Boom?
Lots of things drive economic growth, baby booms are certainly in that category. Data from the Congressional Budget Office shows the US population surging by 6 odd million in 2022-2023. As the chart shows, thanks to the CBO, Census Bureau and WolfStreet.
Other relevant details shown by the chart. Include a 2004-2021 population growth average of about 1-million per year, perhaps a little higher. Beginning in 2022 something changed dramatically. I’m no Demographic Scientist. So, I’m going out on a limb here with a wild guess. This has nothing to do with a domestic baby boom. Everything to do with un-authorized immigration.
A Crisis Brewing?
The housing market data, particularly for existing homes. Keeps going the wrong direction in a hurry. Despite recent mortgage rate declines. Buyers remains stuck on the sidelines, waiting and watching. Price declines are common heading into winter, but are becoming far to prevalent. The recent top 5 Metropolitan Statistical Areas for monthly price declines. Include San Francisco -1.1%, San Jose .9%, Austin .8%, Tampa .7% and Denver .6%. Price declines from the 2022 peak include Austin 20.4%, San Francisco 9.4%, Phoenix 8%, Denver 6.4% and Salt Lake City 5.7%. The recent hurricanes that battered Florida and the Southeast are certain to exacerbate the growing home insurance crisis. Some are calling it the American Nightmare. As the chart below shows.
Thanks to CalculatedRisk for the chart
That’s all for this week folks, I’ll see you again next Friday.
Best, Caleb
Last Week’s Post: Another Strong Week
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