What Investors Should Watch for Next Week

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Nov. 15 (Bloomberg) –- Bloomberg’s Joe Brusuelas previews what investors should watch for next week on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

We get a most recent look at the fomc minutes.

How much were you expecting to hear about mortgage rates?

If you think of it at the chart here, you can see right here, the 18th, when bernanke started talking about tapering and productive 150-basis point back up in long-term rates.

-- about tapering and we see this 150-basis point back up.

Things are improving.

If you look at mortgage rates, not so much.

It's one reason why i don't expect the fed to taper in december.

Likes what is this chart telling us?

-- what's it telling us?

It's more difficult to get a loan to buy a home.

The overall credit quality is improving, but when you have roughly 17% of all first mortgage owners either underwater or holding negative equity positions, you still have a problem.

This is one reason why the fed is reluctant to back off on mortgage backed securities purchases.

Let's look at retail sales.

What will be the key swing factors for october?

Remember.

Retail sales is not inflation- adjusted.

This is nominal data.

The following gasoline prices will really affect the retail sales report.

Will the fall in gasoline prices offset the spillover of the iphone effect into october?

It's good looking at a two month average.

What we're looking is a year- over-year percentage change.

We are seeing a pretty sharp decline in retail sales.

Remember.

Third quarter, personal consumption only increased that 1.5% so we have a household sector that just not doing well.

Given what we've seen, we are really concerned about what growth will look like in the third quarter especially going into critical holiday spending season.

By the way, at this point it does not look so good.

Talk about the divergence we are seeing at the end here.

Yellow was overall retail sales.

The white mind is what we call the control group, retail and including auto, building, and other materials.

You can see that it improves slightly last month, but what we are really seeing is overall weakness.

That is the johnson redbook, a really good leading indicator.

That says retail sales will look ok on the month but not spectacular.

We also have the october consumer price index.

What are you expecting?

Declines in gasoline prices and a median in christ in food resulting in another month of really below what they call the fed's tolerance level on the top line of consumer pricing.

If we look at this chart, the white line is the top line cpi which is below the 1.5% boundary that the fed is concerned about.

The yellow line is core cpi.

The blue line is the cleveland fed mean.

We have a mild disinflation problem.

It is of concern enough that a number of federal reserve members like james bullard continuing mentioning it.

Again, this adds up to the fed not tapering.

The partial government shutdown.

How much did that effect fannie mae and freddie mac funding of loans?

Will there be a noticeable slowing in the pace of home sales?

We will see home sales slowing not only in the october data but probably until early spring of next year.

When you are looking at here is the broad number of homes for sale versus the median price of a home.

When you see the sharp uptick in prices earlier this year, look out how that rot lots of inventory back to market.

That's where we want to see the recovery.

Once they decide that they want to experiment with talking about a taper, what happened?

Prices leveled off, reentry into the market.

What we're really concerned about is can they absorb this rate?

Consumer price index, the key for this number is core intermediate for the pipeline price.

This is it.

Looking at the intermediate averages, both for core and intermediate, the cow far below we are.

We have disinflation moving through the system right now.

This is it is likely to be on hold probably until the middle of 2014. doesn't look like smooth sailing?

She will be confirmed.

She will emphasize forward guidance holding the near-term rate at zero.

Bloomberg lp senior economist joe brusuelas with a look at the

This text has been automatically generated. It may not be 100% accurate.

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