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Good morning. US stock futures dipped in Wednesday morning trading as investors continued to pore over key earnings results.

📉 US homebuilder confidence hits the skids

📝 Our report: Homebuilders are feeling the mortgage rate blues in October with confidence taking a dip to the lowest levels since January. A recently released report from the US National Association of Homebuilders (NAHB) showed the confidence index fell for the third straight month to 40, from a revised September reading of 44.

 🔑 Key points:

• Builder sentiment began sliding in August, the same month where rates on home loans exceeded 7%.

• Amid the Federal Reserve’s rate hike campaign, mortgage rates have steadily risen since last year, now remaining at a two-decade high.

• Demand for homes was bolstered in the first half of 2023 as high rates discouraged homeowners from selling, limiting inventory and lifting the appeal of new construction.

💡 So what: A retreat in homebuilder confidence, coupled with historically high interest rates could make the dream of homeownership for many Americans harder to achieve. The impact of the home construction market also has spillover effects on the rental market as an inability to purchase homes may drive demand for greater rental accommodation causing rents to rise as well.

Wednesday - Fed Beige Book, New York Fed President John Williams Speaks

Thursday - Fed Chairman Jerome Powell Speaks, Initial Jobless Claims (wk end Oct 13)

Friday - No Major Economic News

☣️ How much risk are you taking with your investments?

🚙 Tesla does major recall

🐢 Is China’s economy slowing down?

📈 US economic data defies recession forecasts

WHAT: The American consumer is on a roll and perhaps keeping the US from the onset of any possible recession! US retail sales continue to defy expectations, rising 0.7% in September, according to the Commerce Department. The boost in sales is also helping to stabilize manufacturing, with the Federal Reserve’s index of industrial production rising to the highest level in five years.

WHY: The Atlanta Fed’s GDPNow forecast was boosted to show the economy grew an annualized 5.4% in the third quarter which would be the strongest since the end of 2022.

⚔️ Meta, US government square off over privacy concerns

WHAT: Meta Platforms, parent to the social media trio of Facebook, Instagram and WhatsApp, is in a legal dance with the US government over privacy rules. The Federal Trade Commission (FTC) is planning to tighten a 2019 privacy order while accusing Meta of misleading parents about how much control over who their children have contact with via the Messenger kids app.

WHY: Meta relies on digital ads targeted using personal data for more than 98% of its revenue. The company is also battling short video app TikTok for young users’ attention.

🖥️ IRS test waters with new tax filing system

WHAT: The US Internal Revenue Service is rolling out the red carpet for a tax return tech trial. Selected tax payers in 13 states will be able to try out the agency’s pilot electronic free-file tax return system beginning in January. The IRS estimates hundreds of thousands of tax payers will participate in the limited rollout of the program.

WHY: The IRS faces intense blowback from private tax preparation companies that have made billions from charging people to use their software.

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