Stocks fell hard in early trade, on little news of significance, sending the major averages into the final hour with large losses. Bond Yields also moved higher as did the Dollar. Higher interest rates will put increasing pressure on debtors who have taken out record levels of debt in the post crisis period since 2009. For emerging markets the higher Dollar will serve as a double whammy, dramatically increasing repayment costs and threatening to trigger more severe emerging market crises than that seen already. With the International Monetary Fund and others warning of another financial crisis, the stage is set.
Recent auto sales data suggests that debt saturation has become a significant impediment to sales following a report from Automotive News, using manufactures data. GM, Toyota, Ford, Nissan, and Mazda all reported double digit sales declines during September. Overall sales fell 5.8% for the month and 1.8% from a year ago. The few bright spots include Tesla as sales jumped 416% for the month and 204% from a year ago as the company desperately needs to ramp sales if it is to survive. Volvo and Fiat-Chrysler also reported notable sales gains.
Factory Orders beat expectations with a 2.3% advance in August, its best showing in 5-months, on a 6-month high in durables goods orders.
REIS reported 3rd quarter vacancy rates for a number of property types. Usually a fairly tame series, regional mall vacancy rate surged .5% to 9.1%, the previous crisis peak was 9.4%. Office vacancies were unchanged at 16.6%. Apartment vacancies increased slightly to 4.8% in the 3rd quarter to round out the series.
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