More on The Weave
I covered my $CRWV short between $62 AND $63 on Sunday night – as reported.
Positions: None.
More Housing Pain Reinforces This Bullpen Decision
September housing starts miss, but there is more to the margin pressure story.
Rebound in Chip Stocks Lifts Nasdaq Into the Green
The Philadelphia Semiconductor index ($SOX) +1.2% is now up on the session pulling the Nasdaq-100 ($QQQ) +0.6% into the green as well.
Cannabis Tweet of the Day
From Toddo:
Positions: None.
Pending Home Sales Plummet to Record Low
Contract signings for existing homes plunged 7.3% in September, the biggest drop since December, far worse than the 3.9% decline expected and taking the index to a record low.
▪️ The index fell to 66.0, a record low in data back to 2001, well below January’s prior low of 70.8
▪️ All four regions saw declines, led by the West (-9.2% month-over-month, -15.0% year-over-year)
▪️ 30-year mortgage rates per Freddie Mac averaged 6.86% in September, the highest since January 2025
And these do not account for cancellations, which have been rising.
Don’t Ignore Message From Nvidia, Broadcom, Micron, Sandisk Charts
Some of the biggest names in tech are underperforming the market, which is still in consolidation mode.
Corporate Bonds Flash Warning
If the negative pattern develops, I’d be quick to hit the sell button.
BofA Still Looks for October Fed Hike
BofA’s Bhave sticks with an October Fed hike call, though markets price only ~20%.
BofA’s take: It comes down to who Chair Warsh really is.
“The inflation picture has gotten worse on net since the Sep meeting. The beat in Sep inflation was large/broad-based enough to offset last month’s bigger-than-expected downward revisions. Core PCE could plausibly end the year at 3.4%, especially since the booming nominal economy increases the risks that the energy shock will get passed through. Most of the FOMC was on board with two hikes this year. Why not do the second one in Oct, to retain the optionality for a third in Dec?”
- Core PCE was 3.0% y/y in August; BofA sees ~3.1% in September
- Year-end lands at 2.9% to 3.4% depending on Oct-Dec monthly prints
- Even 0.15%/month (~1.8% annualized, below the Fed’s 2% target) only gets it to 2.9%
“Delivering a hike in Oct would firmly signal to markets that the Fed has exited the business of coordinated messaging [referring to speeches from several policymakers].”
“With the Oct meeting just six days before the elections, policymakers might not want to risk a market disruption by delivering a large hawkish surprise. This is perhaps the best reason for the Fed to stay on hold in Oct.”
“We have low conviction as to whether Warsh is serious about bringing a ‘sea change’ to the Fed. We’re giving him the benefit of the doubt for now, by sticking with our forecast for a hike in Oct. But it’s a very close call.”
