Market participants in the US will take a day off this week to gorge themselves on viscous, canned gravy and fall asleep watching pro football, a solemn tradition in observance of the time Native Americans saved a band of ignorant settlers from starving, a favor the settlers later repaid by committing genocide.
Another version says families gather joyously at tables around the country to express gratitude for kinship and the myriad blessings associated with living in an advanced economy, a tradition loosely related to a jointly-held banquet at which Native Americans and European settlers celebrated peaceful coexistence.
Whichever version you espouse, you’ll have Thursday off and probably Friday too. Friday is when Americans gather at local big box stores to engage in ceremonial combat to determine who gets an ostensibly limited supply of cheap televisions and gadgets, most of which can be purchased online for similar prices and delivered safely to your front door. The only difference this year is that the supply might actually be limited.
But before all of that, traders and investors will need to digest a cornucopia of data which looks impressively daunting (or annoying, depending on how you want to look at it) if you cram it into a calendar block.
Wednesday’s deluge includes claims, durables, the final read on University of Michigan sentiment for November and new home sales, as well as October personal income and spending. The second read on Q3 GDP is due as well, as are the November Fed minutes.
There’s something masochistic about putting all of that out there on a day when no one will be interested in parsing it. Folks are traveling this year, and millions of Neal Pages and Del Griffiths will risk life, limb and deadly viral pneumonia to eat a piece of turkey with distant relatives, some of whom they won’t even recognize. TSA Administrator David Pekoske told CNN the number of people in the air for Thanksgiving will break pandemic-era travel records “without a doubt.”
“The pandemic record right now stands at about 2.2 million people and I would expect we’ll definitely exceed that,” Pekoske said, a couple of days ago. It looks like traveler throughput actually topped that on Friday (figure above).
This week’s data does have the potential to help refine various narratives. Personal income and spending data will, of course, be accompanied by PCE prices, which will invariably confirm that inflation is running hot. October CPI was a veritable calamity and with smoothed measures trending sharply higher as well, this week’s inflation data is unlikely to provide much in the way of respite.
The final read on University of Michigan sentiment will be watched for more anecdotal evidence of consumer angst around rising prices. The preliminary report showed the headline gauge plunging to a fresh decade nadir as Americans expressed consternation (figure above) over a perceived lack of “effective policies.”
Middle class families won’t need to consult the data, though. They’ll notice it in the price of turkey, which is up 24% compared to last year (figure below), according to a Farm Bureau report.
That data is presented “as is,” so to speak. The AFBF Thanksgiving dinner survey has been conducted every year since 1986. It’s “informal.”
“Several factors contributed to the increase in average cost of this year’s Thanksgiving dinner,” AFBF Senior Economist Veronica Nigh said earlier this month, in a press release. Nigh cited “dramatic” economic disruptions, supply chain snarls, broad inflationary pressure and elevated global demand for food, “particularly meat.” The turkey will cost around $24 this year. The whole “feast” will run roughly $54, assuming 10 people at the table.
Prices for food at home in the US have risen steadily alongside surging costs globally (figure above).
The Fed minutes are stale. They always are, but particularly now. The November meeting (at which the taper was unveiled) came ahead of October’s jobs report and subsequent data, including inflation figures and robust retail sales numbers, which, when taken together, could be construed as an argument for a faster wind down of monthly bond-buying. Last week, a trio of Fed officials including Clarida and Waller suggested the taper pace may need to be accelerated.
Additionally, Joe Biden is expected to unveil his pick for Fed Chair this week. I doubt there’s much utility in quoting any betting market odds. Suffice to say Powell will likely get the nod and if he doesn’t, Brainard is a known quantity. The market would react to a change in leadership, but after some position jostling in rates, everybody would get over it.
Haha- an oldie but goodie.