The Overnight RateThree moves
Housing. Signed contracts to buy existing homes fell 7.3% in September and were 11.3% below a year earlier, NAR’s pending home sales report showed (NAR). All four regions fell. NAR’s Lawrence Yun blamed the jump in borrowing costs. A pending sale usually closes within one or two months, so October and November closings are already set lower. Monday’s test came in between our two lines. Census counted single-family groundbreakings at an 859,000 yearly rate, 4.6% below August, a hair above our 850,000 pullback mark and far from 950,000 (Census). Yun’s case for steady prices is fair: few distressed owners have to sell. We think the bargaining power keeps moving to buyers who can still qualify.
Credit. Capital One’s monthly filing shows 3.74% of its domestic card balances were 30 or more days late at the end of September, up from 3.57% in August (SEC filing, August filing). That’s $9.74 billion behind, $444 million more in a month by our math. Losses went the other way. The card charge-off rate, balances written off as lost, fell to 3.66% from 4.16%, and the bank released $225 million of loan reserves in the quarter (Capital One). Auto loans 30 days late rose to 4.64% from 4.54%. One month can be noise. Still, late payments come first and write-offs follow, so we’d call the reserve release early.
Corporate money. United paid an average $3.90 a gallon for jet fuel in the third quarter, up 60% from $2.43 a year earlier, and still grew revenue 17% to a record $17.9 billion (United). Passengers covered it. Revenue per passenger mile rose 16.8%, to 21.86 cents. For this quarter United assumes about $4.80 a gallon, 23% above the third quarter by our math, while analysts’ estimates assume about $4.35 (United investor update). Fair objection: premium and loyalty revenue, each up 17%, did a lot of the lifting. We doubt holiday fares get cheaper while United guides revenue up more than 20%.
What could move prices
Meta reports third-quarter results after the close, with its call at 4:30 PM ET (Meta). In July it put 2026 capital spending at $130 billion to $145 billion (Meta). That budget is the order book for chips, turbines and grid hookups. Utilities plan around it. A number above $145 billion means more building while business AI spending sits flat. Our view: an early look at next year matters more than this quarter, and a cut would hit suppliers and utility load forecasts first.
The calendar
BLS publishes September state jobless rates at 10:00 ET today, and third-quarter usual weekly earnings follow at 10:00 ET next Wednesday, Oct. 28 (BLS). In the second quarter, median weekly pay for full-time workers was $1,251, up 4.6% from a year earlier, against 3.9% inflation (BLS). We’d call a gain under 3.7%, September’s inflation rate, news that pay fell behind, and anything over 4.6% news that it sped up.
Who pays: the Los Angeles ratepayer
Los Angeles Mayor Karen Bass asked the Department of Water and Power’s board Tuesday to pause shutoffs through year-end for customers facing higher bills after record heat, and said customers “can just pay what they can afford now” (LADWP). She also pointed them to Level Pay, which spreads a bill over 12 months. The mechanism, once: a shutoff pause defers the bill. The balance is still owed. LADWP is city-owned, so whatever goes uncollected comes out of revenue that everyone else’s rates fund. Payer: the customers who keep paying, and later the ones who catch up. Payee: households short on cash this fall.
Net net: LA’s heat bill is still owed, and the paying customers are the backstop.
Also moving
- AI spending: Ramp says business spending on AI models through its cards showed virtually no growth in August and September, mostly because model prices fell (Ramp); companies get more AI for the same bill.
- Data centers: Memphis’s city council passed a 135-day halt on new data-center construction Tuesday after voting down a one-year moratorium (CBS News); developers with Memphis sites carry the wait.
- Fed: December’s hike trades at 75 cents on Kalshi and October’s at 12 (Kalshi); prime-linked card and HELOC rates reset the day the Fed moves.