US: Consumer Confidence Falls In November, Trump Problems w/Economy Mount
Semafor reports, “US consumer confidence declined more than expected in November, according to the Conference Board, while retail sales growth slowed in September.”
- The Conference Board said, "Declining confidence could pose political problems for Trump and Republicans in Congress, as the dimmer views of the economy were seen among all political affiliations and were particularly sharp among independents."Semafor notes that the data suggests the "economy is heading into the all-important holiday season buffeted by a cooling labor market, continued inflationary pressures and signs consumers were easing their pace of spending and searching for bargains,” The Wall Street Journal wrote. American consumers plan to spend less this Black Friday, according to a Deloitte survey. They’re likely to spend more on the usual Thanksgiving staples, according to The Associated Press, as tariffs hit canned goods.”
- Silver Bulletin noted earlier this week that, "Trump's net approval rating on the economy broke -20 for the first time yesterday, and his net inflation approval rating is even lower (-34)."
- Ramesh Ponnuru wrote in WaPo earlier today, "Trump and his party would be better off if he had heeded the public’s concern about high prices earlier. It’s still not too late — especially for changing minds before the 2028 elections. To salvage the midterms, though, Trump might need to invent a time machine."
Figure 1: US Consumer Confidence Index
Source: Semafor, Conference Board
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US OUTLOOK/OPINION: Core PCE Estimates Soften After CPI, Fed In The Dark On PPI
The data quality concerns of the CPI report (40% "different cell" imputation in the September release before data collection under the government shutdown) will further complicate the Fed’s underlying of latest inflation trends, with a lack of PPI report this month leaving approximately 65% of inputs for PCE inflation in September ahead of this week's FOMC meeting.
- We have seen median core PCE estimates for September trimmed from ~0.30% M/M prior to CPI to closer to an average ~0.25% M/M since then, albeit from a modest sample.
- The latter covers 0.23% M/M for Nomura (revised down from 0.30% pre-CPI), 0.26% M/M for Barclays (revised down from 0.31% pre-CPI), 0.26% M/M for Deutsche Bank (revised down from 0.32% pre-CPI) and 0.26% M/M for TD Securities.
- If accurate, it points to near enough the same monthly pace as the 0.23% M/M in August and 0.24% M/M in July.
- A 0.25% M/M print and no revisions would see core PCE inflation at 2.9% Y/Y for a third consecutive month (2.88% Y/Y). Similar three- and six-month run rates of 2.9% and 2.8% annualized respectively would suggest there is still some acceleration needed to be seen to meet the median FOMC forecast of 3.1% Y/Y in 4Q25.
US: FED Reverse Repo Operation
RRP usage climbs to $10.642B with 13 counterparties this afternoon from $2.435B Friday (lowest level since mid-March 2021). Compares to this year's high usage of $460.731B on June 30.
PIPELINE: Corporate Bond Update: $7.5B Amphenol 7Pt Launch
Surge of issuance ($27B to price Monday) ahead of the FOMC and month end, many still sidelined ahead earnings.
- Date $MM Issuer (Priced *, Launch #)
- 10/27 $7.5B #Amphenol $750M 2Y +33, $500M 2Y SOFR+53, $750M 3Y +43, $1B 5Y +53, $1.25B 7Y +63, $1.6B +10Y +65, $1.6B 30Y +75
- 10/27 $3.5B #HCA Inc $500M 5Y +72, $1B 7Y +85, $1B 10Y +95, $750M 30Y +115
- 10/27 $3.5B #Philip Morris $750M 3Y +43, $300M 3Y SOFR+66, $750M 5Y +58, $850M 7Y +68, $850M 10Y +78
- 10/27 $3B #Sanofi $400M 2Y +25, $500M 2Y SOFR+46, $400M 3Y +30, $500M 3Y SOFR+54, $1.2B 7Y +45
- 10/27 $2.25B #Turkiye 11Y 6.8%
- 10/27 $1.5B #Southwest Airline $750M 3Y +88, $10Y +128
- 10/27 $1.25B #Procter Gamble $750M 7Y +32, $750M 10Y +37
- 10/27 $1B #Prologis Targeted Fund $400M +5Y +70, $600M +10Y +90
- 10/27 $1B #Lloyds PerpNC10 6.625%
- 10/27 $1B #DNB Bank 6NC5 +77
- 10/27 $1B #Aker BP 10Y +132
- 10/27 $500M Kaiser Aluminum 8.3NC3.3 6%a
