Today, we got the latest read on the US housing market.  October existing home sales declined 3.4% to 5,360,000 and while it is a healthy rate, it did not sustain September’s pace of 5,550,000 units. However, sales were up 3.9% year over year.  Supply edged up to 4.8 months from September’s 4.7.  The median sales price was also down slightly to $219,600 from $221,700 in September.

A strengthening labor market is providing the impetus for more household formation as more young adults leave their parent’s nest. The housing market remains strapped and the shortage of homes for sales continues to drive up prices and makes it difficult for new first–time buyers and those on the lower end to purchase a home.

Sales throughout the regions varied.  The West saw the largest drop, down 8.7%, followed by a 3.2% decline in the South. These two regions had constrained inventory and thus, according to the Realtors group, experienced large price increases.

In the Midwest, sales fell 0.8 percent while the Northeast was unchanged.

Crude got a bit of a boost today after Saudi Arabia stated it would do its part to help stabilize pricing by working with other oil producing and export countries to make up for the oil glut based on global concerns.  This helped give a bid to crude prices, which are up about 1%, at $42.38.   Of course, we have heard much of this rhetoric before, so it remains to be seen if this jump will hold for more than a few hours and days.

The latest Treasury bond auction of $26 billion in 2-year notes, fetching a yield of 0.948%, the highest since 2010.  San Francisco Federal Reserve President John Williams’ statements while speaking at the University of California on Saturday indicating that there is “strong case” for a rate hike in December, helped propel bond yields. Williams said that "Assuming that we continue to get good data on the economy, continue to get signs that we're moving closer to achieving our goals" and inflation is headed towards the Fed’s 2% target, "a strong case that can be made in December to raise rates."

The markets are trying to hold on to slight gains helped by the news from the Saudi’s.  Volume is light however, and overall, it’s a lackluster day outside of the news that Pfizer (PFE) will acquire Allergan (AGN) for $160 billion or $363.63 per share.  This makes it the largest deal in the health care sector.  So chalk it up to another major US corporation looking to flee Uncle Sam’s tax wrath, as Pfizer will relocate from New York to Ireland.