Despite the increase in housing starts, homebuilders are battening down the hatches, with rates above 7% significantly impairing buyer traffic as reflected in yesterday\u2019s homebuilder sentiment report. August sentiment declined sharply from 56 in July to 50 and disappointed with forecasters expecting an unchanged month-over-month (m\/m) reading. The 50 level is the border between negative and positive sentiment. The m\/m drop is the first since December and the lowest level since May. Builders reported an increase in price discounts, which climbed from 22% in July to 25% in August. They also complained about commodity prices pushing up construction costs. Weighing on sentiment mostly was the buyer traffic component, which fell from 40 to 34. Current sales conditions and sales expectations also hurt results, declining from 62 and 59, respectively, to 57 and 55.<\/p>\n\n\n\n Markets are quietly awaiting the release of the 2:00 pm Eastern Time minutes from the Federal Reserve\u2019s July meeting, which are likely to detail levels of dissidence and accord among the central bank\u2019s Federal Open Market Committee regarding last month\u2019s fed funds rate increase. Most major U.S. equity indices are near the flatline, but the Dow Jones Industrial Average is up 0.3%. Most sectors are up, while the health care, real estate, consumer discretionary, and communication services categories are weighing on overall performance. Investors are scooping up Treasures at the margin, with most yields across the curve down a basis point (bp) or two. The dollar is equally quiet, with its index down 1 bp to 103.19. As market players across asset classes patiently await the opportunity to go risk-on or off, WTI crude oil is near the flatline as well, with prices down 0.1% to $80.90 per barrel.<\/p>\n\n\n\n With a weakening real estate industry and Home Depot yesterday providing disappointing guidance because many homeowners have completed large projects or are refraining from doing so because of high financing costs, other businesses are pessimistic about retail spending. Just this morning, Target lowered its full-year same-store sales guidance to a decline in the mid-single-digit range from an earlier estimated range of a single-digit decline to a single-digit increase. CEO Brian Cornell says that inflation has caused consumers to spend a larger portion of their budgets on groceries and beverages, which represent only a small percentage of the company\u2019s sales. For the second quarter, Target\u2019s revenue of $24.77 billion missed the $25.16 billion that analysts anticipated. Its earnings per share (EPS) of $1.80, however, exceeded the $1.39 expected by analysts. In the year-ago quarter, Target generated an EPS of only $0.39 because it aggressively lowered its prices to clear a glut of inventory. Consumer weakness extends abroad with Tencent, which is a Chinese online gaming provider, generating $20.46 billion in revenue, which missed the expected $20.79 billion in revenues. After aggressively cutting costs and divesting from non-core business, Tencent\u2019s second-quarter earnings rose 41% year-over-year but missed expectations.<\/p>\n\n\n\n![\"homebuilder](\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/08\/Picture1-10.png\")
<\/figure>\n\n\n\nInvestors Await Fed Minutes<\/strong><\/h2>\n\n\n\n
Corporations Warn of Weakening Consumers<\/strong><\/h2>\n\n\n\n
Fed Minutes Could be Pivotal for Investor Sentiment<\/strong><\/h2>\n\n\n\n
\n