ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Housing Market Intro and Summary The pandemic recession is over as far as the housing market is concerned. The case for V-shaped recoveries was evident in the last Housing Market Review. The recovery completed in August with important new highs in existing and new home sales and in home builder sentiment. Ultra-low interest rates support … Read more
Housing Market Intro and Summary The housing downturn ended almost as quickly as it began. V-shaped recoveries are evident across a spectrum of data, especially in home builder sentiment and new home sales. Home builders continue to describe extremely strong demand that, in many cases, goes beyond the release of buying power pent-up by the … Read more
The Housing Market Index (HMI) soared to 72 in July. The 14-point move completed a V-shaped recovery in the sentiment of home builders. Unlike the reaction to the surprisingly strong June HMI, the reaction to July’s surprise was definitely positive. The Message in Home Builder Sentiment The National Association of Home Builders (NAHB) explained the … Read more
Housing Market Intro and Summary I asked in my last Housing Market Review whether the housing downturn could already be coming to a swift end. The stocks of home builders delivered that message and more and more earnings reports from home builders are apparently delivering messages of a sharp recovery. A widening divergence between existing … Read more
Housing Market Intro and Summary Could the housing downturn already be coming to a swift end? The stocks of home builders are delivering this message. They have enjoyed a very healthy rally and recovery from the depths of the March stock market crash. The challenges ahead are large: worsening economic conditions, unemployment at historically high … Read more
U.S. Gross Domestic Product (GDP) for the first quarter of 2020 (advanced estimate) plunged by 4.8% as the coronavirus pandemic put the economy on lockdown. The following categories made positive contributions to GDP in ascending order of their contribution to the percentage change: Housing and utilities: .08% Change in farm inventories: 0.10% Government consumption expenditures … Read more
Housing Market Intro and Summary Something surprising is happening in the middle of the current downturn in the housing market: buyers keep coming and home builders are staying resilient and resolute. A series of earnings reports from publicly traded home builders do not reflect the historic plunge in builder sentiment from April (see below). The … Read more
Housing Market Intro/Summary The housing market has become a lot more dynamic than usual, so over the past few months I have written more pieces beyond the monthly housing market review. The current economic crisis coming from the coronavirus pandemic has increased my frequency of coverage. The most telling moments came when I wrote to … Read more
Housing Market Intro/Summary The short-term outlook for the housing market is clouded by the current global turmoil generated by the coronavirus. The housing data discussed below were all collected before the virus came to the forefront of the minds of Americans. While demand for housing in the U.S. should remain strong (and certainly times like … Read more
In recent weeks, the trade in the stocks of home builders provided timely reminders in the limited meaning in price action. The market periodically makes key “mistakes” that provide buying (or selling) opportunities. A Fresh Turning Point At the end of December, I described a “precarious divergence” between the stocks of home builders and the … Read more