Good morning. US stock futures inched higher in Friday morning trading as investors awaited data on the health of US consumers.

"All models have faults — that doesn’t mean you can’t use them as tools for making decisions"

Myron Scholes

Top News

Biden Admin to sell offshore drilling rights

WHAT: The Biden Administration is setting sail for some offshore oil drilling rights in the Gulf of Mexico over the next five years and it’s causing quite the stir among environmentalists! According to information from the Interior Department, the Biden Administration has ruled out adopting a plan that would completely ban offshore auctions until 2028, paving the way for bidding for offshore oil blocks.

WHY: Oil industry advocates had pushed for a robust sales schedule to ensure steady development and production in the Gulf of Mexico which provides roughly 15% of US crude output today.

Fed exec: Too soon to talk about another rate hike

WHAT: Federal Reserve Bank of Richmond President Thomas Barkin isn’t yet ready to place his bets on the Federal Reserve’s next policy move! Speaking during an interview on Bloomberg TV, Barkin said it was “too early” to consider the prospect of another interest rate hike. “I think there are a wide variety of possible outcomes facing the economy and because of that…it’s good for the Fed to take some time and see how the data plays out” Barkin said.

WHY: The Fed has in recent months pivoted to a slower pace of increases after a historically rapid tightening that took the fed funds rate from nearly zero in March 2022, to 5% in May of this year.

US homebuying activity takes nosedive

WHAT: Homebuyers across the US just did a “reverse house-hunt” dance from the market heading into fall, as rising mortgage rates drained their purchasing power. According to the latest data from the National Association of Realtors, pending home sales for August plunged 7.1% from the month before, down from the 0.9% increase recorded in July.

WHY: The drop in the index, a leading indicator of the housing market’s health, further highlights how housing activity has been smothered by expensive mortgages, rising prices and low inventory.

In Other News

Cali fast food workers get pay bump

WHAT: California’s fast food workers are about to get a nice bump in their paychecks! State Governor Gavin Newsom just signed a new law that mandates workers be paid $20 per hour starting in April 2024.

WHY: California’s fast food workers earn an average of $16.60 per hour, or just over $34,000 per year, according to the US Bureau of Labor Statistics.

They didn’t save as much!

WHAT: Uncle Sam just did some early fall cleaning in the economic stats department! According to updated data from the Bureau of Economic Analysis, US households saved some $1.1 trillion less than previously thought over the past six years. The update said Americans stashed away 8.3% of their disposal income annually from 2017-2022, down from a previously estimated 9.4%

WHY: The state of household finances is a key question facing the US economy going forward as consumers confront increasing headwinds from high gasoline prices and the resumption of student loan payments.

Now it’s the meat industry’s turn to face antitrust allegations…

WHAT: Looks like the US Department of Justice is serving up an antitrust lawsuit with a side of drama. They’ve got beef with data provider Agri Stats, saying their weekly reports on meat pricing and sales have enabled anticompetitive practises in the chicken, pork and turkey industries.

WHY: Meat processors pay millions of dollars for Agri Stats reports that include “loosely anonymized” costs, output, and price information, which the companies then use to align their prices with competitors.

Key Economic Events

• Friday - U. Of. Michigan Consumer Sentiment

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