1. Fed Minutes and a 10-Year Auction on Deck
Tomorrow, all eyes will be on the Federal Reserve’s meeting minutes. Everyone will be watching what the Fed is thinking about inflation.
Keep in mind, tomorrow is also a 10-year bond auction. That will be interesting to watch because the past few auctions have been “great,” with demand, but yields kept on rising.
Then, on Friday, we get Canadian employment numbers. Once again, that will be interesting to watch given what’s happening with trade and the uncertainty around the Canadian economy. A little over 6,000 jobs are expected, and the unemployment rate is expected to tick a little higher.
2. Oil Cools Off, For Now
Oil is cooling off a little, with WTI at $87.78 and Brent below $100. There’s a lot of positive news around oil flowing out of the Strait of Hormuz, and attacks on oil infrastructure seem to be calming at the moment.
But again, this is a fluid situation.
Oil has been volatile and has been moving on headlines a lot. Could it go down? Yes. Could it go higher? Yes. That’s what true volatility is. Watch your allocations here.
3. Toronto Home Prices Drop 9% — And Housing “Never Goes Down”
Toronto housing market data is out for September. Home sales fell 9% year over year. Home prices are down roughly $53,627 on the average home over the last year.
And we thought housing never goes down. Wink, wink.
As all this happens, listings also declined by 14.4%.
We suspect decline in sales and listings has a lot to do with uncertainty and potentially higher mortgage rates. Interesting to watch how this plays out. The market continues to be frozen.
4. Stocks Hit Highs on a Few Strong Shoulders
Stocks are unstoppable, and they just keep making new highs. Pain trade is slow grind higher rather than mover lower at the moment. The S&P 500 is at a new high, and the Nasdaq has already made a new high.
But if you look underneath, it’s a few companies driving the indices higher, while a lot of companies are underperforming.
Earnings season begins soon. Watch for guidance, watch how leveraged companies do, and watch how banks react. Rising yields can really have an impact here.
5. Gold Holds $4,100, But Where’s the Excitement?
Gold is holding really well around $4,100, but there isn’t a lot of excitement about the upside. $4,000 is a big level we’re watching closely in case $4,100 breaks.
Bitcoin is itching to go higher.
The Loonie: Watching the 70-cent level against the U.S. dollar. If that breaks, there could be more downside for the loonie.
France continues to be in the headlines and is worth watching closely. It’s the second-biggest economy in the Eurozone, and if something breaks (take a look at the yields), a problem in the Eurozone could quickly become a problem for North America.
Lastly, there’s a lot of noise about a plague case in Russia. The interesting part is the headlines around it. We’re watching it closely. Could it get worse? We don’t know. It’s sort of a tail event at the moment.