MarketBeat Minute(2023-10-26)

Equity markets continued to sell off on Wednesday following stronger than expected New Home Sales. The pace of new home sales surged in September as prospective buyers tried to front higher interest rates. The news would otherwise be good equities but reveals sustained demand in the housing market that will underpin high home prices and inflation. The S&P 500 shed nearly 1.5% at the low of the session, setting a new low, and it appears ready to move lower again later this week.

The next 2 days will be trying for equity markets. The Q3 GDP read, September retail sales, and the PCE price index are due, and all are expected to be hot. In this scenario, the FOMC will keep interest rates high, and the risk of additional increases grows. Recent comments from JPMorgan CEO Jamie Dimon suggest that another single 25 basis point hike will be insufficient to cap inflation, and multiple hikes are still ahead. The odds that the FOMC will break something in that scenario are insurmountable.