• Pivotfarm
    07/27/2014 - 17:57
    There never seems to be a day that goes by without someone predicting that China is going to go down the Yangtze and end up some creek without a paddle.

New Home Sales

Tyler Durden's picture

Gary Shilling: "Q2 GDP Was Closer To 1% Than To 3%. It Could Even Be A Negative Number"





This week, in the aftermath of the Q1 -2.9% GDP disaster, the biggest "non-recessionary" drop in 67 years which was blamed on harsh weather (because there have never been harsh winters in the past 67 years), we get the first glimpse of what Q2 GDP was in the US economy. It is expected to print just shy of 3%. However, one person disagrees: Gary Shilling believes that not only will Q2 GDP be closer to 1% than to 3%, there is a fairly good chance it could be negative, which of course would mean that the US economy has officially entered a recession.

 
Tyler Durden's picture

Futures Dragged Down By Visa, Amazon Despite USDJPY Levitation





Following yesterday's disappointing results by Visa, which is the largest DJIA component accounting for 8% of the index and which dropped nearly 3%, while AMZN's 10% tumble has weighed heavily on NASDAQ futures, it has been up to the USDJPY to push US equity futures from dropping further, which it has done admirably so far with the tried and true levitation pump taking place just as Europe opened. One thing to keep in mind: yesterday the CME quietly hiked ES and NQ margins by 6% and 11% respectively. A modest warning shot across the bow of what may be coming down the line?

 
Tyler Durden's picture

New Home Sales Collapse 20% From May To Dec 2012 Levels; Biggest Miss In A Year





New Home Sales in June plunged to 406k vs 504k in May... (remember that 504k print was the catalyst for 'weather' is over and the market to surge 10%) Now that has soaked in, consider this is equal lowest sales print since September 2013 (and Dec 2012) and the biggest miss since July 2013.The last 3 months of exuberance have all been revised significantly lower (most especially May's appartently make-believe number). What is even more troubling in the "survey" vs "reality" world is this collapse in sales when NAHB Sentiment surged to near cycle highs. For context, this is a 5-standard-deviation miss from economists' expectations, below the lowest guess and a massive miss from almost highest estimate Joe Lavorgna's 510k.

 
Tyler Durden's picture

Frontrunning: July 24





  • EU to weigh extensive sanctions on Russia (FT)
  • U.S. lifts flight ban to Israel (Reuters)
  • Russia says will cooperate with MH17 probe led by Netherlands (Reuters)
  • Norway faces ‘concrete and credible’ terrorist threat (FT)
  • Don’t Tell Anybody About This Story on HFT Power Jump Trading (BBG)
  • But... but... PMI: Unilever Sales Growth Misses Estimates on Asian Slowdown (BBG)
  • World’s Biggest Wealth Fund Reviews $8 Billion Russian Stake (BBG)
  • Qualcomm latest US tech company to reverse in China (FT)
  • Hamptons Home Sales Rise as Buyers Find More Inventory (BBG)
 
Tyler Durden's picture

Overnight Manufacturing PMI Euphoria Boosts Futures To Fresh Record Highs





Ever since going public, it appears that Markit's giddyness about life has spilled over into its manufacturing surveys: after a surge in recent Markit mfg exuberance in recent months in the US, it was first China's turn overnight to hit an 18 month high, slamming expectations and fixing the bitter taste in the mouth left by another month of atrocious Japan trade data (where even Goldman has thrown in the towel on Abenomics now) following which the euphoria spilled over to Europe just as the triple-dip recession warnings had started to grow ever louder and most economists have been making a strong case for ECB QE. Instead, German July mfg PMI printed at 52.9, above the 52.0 in June and above the 51.9 expected while the Composite blasted higher to 55.9, from 54.0, and above the 53.8 expected thanks to the strongest Service PMI in 37 months! End result: a blended Eurozone manufacturing PMI rising from 51.8 to 51.9, despite expectations of a modest decline while the Composite rose from 52.8 to 54.0, on expectations of an unchanged print. Curiously the soft survey data took place as Retail Sales declined both in Italy (-0.7%, Exp. +0.2%), and the UK (-0.1%, Exp. 0.3%), which incidentally was blamed on "hot weather." Perhaps Markit, now that it has IPOed successfully, can step off the gas or at least lobby to have surveys become part of GDP.

 
Tyler Durden's picture

Key Events In The Coming Holiday-Shortened, Very Busy Week





The holiday shortened, and very busy, week includes the following highlights: [on Monday] US Chicago PMI; [on Tuesday] US ISM Manufacturing, Construction Spending, and Vehicle Sales, in addition to a host of PMI Manufacturing in various countries; [on Wednesday] US ADP Employment, Factory Orders; [on Thursday] US Non-farm Payrolls and Unemployment, MP Decisions by ECB and Riksbank, in addition to various Services and Composite PMIs; [on Friday] US holiday, Germany Factory Orders and Sweden IP.

 
Tyler Durden's picture

After Shakedown, Overnight Markets Regain Their Calm





The S&P500 has now gone 47 days without a gain or loss of more than 1% - a feat unmatched since 1995, according to AP.  Overnight markets are having a weaker session across the board (except the US of course). Even the Nikkei is trading with a weak tone (-0.7%) seemingly unimpressed by the Third Arrow reform announcements from Prime Minister Abe yesterday (and considering in Japan the market is entirely dictated by the BOJ, perhaps they could have at least coordinated a "happy" reception of the revised Abe plan). Either that or they have largely been priced in following the sizable rally in Japanese stocks over the past month or so. Abe outlined about a dozen reforms yesterday including changes to the GPIF investment allocations and a reduction in the corporate tax rate to below 30% from the current level of 35%+. Separately, the Hang Seng Index (-0.06%) and the Shanghai Composite (-0.41%) 98closed lower as traders cited dilutive IPOs as a concern for future equity gains.

 
Tyler Durden's picture

New Home Sales Surge By 18.6% In May, Now Only 63% Below Pre-Crisis Highs





While we will have much more to say about the price dynamics in the West in a follow up post, where the Western housing market appears to be appreciated right now is in the just released New Home Sales report, which showed that in May new home sales soared by a whopping 18.6%, orders of magnitude above the 1.4% increase expected, and resulting in some 504K new houses sold, far above the 439K expected, and certainly above the downward revised April print of 425K. What caused this surge? Simple: the West, which saw a 34% surge in new home sales, from 97K to 130K, the highest one month jump since February 2013.

 
Tyler Durden's picture

Frontrunning: June 24





  • The Kerry Konfusion Kontinues: Kerry urges Kurds to save Iraq from collapse (Reuters)
  • Abe Unveils Japan’s New Growth Strategy (WSJ)
  • Because the recovery: Avon to Cut 600 Jobs as CEO McCoy Seeks to Trim Expenses (BBG)
  • Iraqi Parties Pressure Prime Minister Nouri al-Maliki to Step Down (WSJ)
  • Ukraine Rebels Call Cease-Fire to Match Government Truce (BBG)
  • IRS accused of obstruction over lost emails in Tea Party affair (Reuters)
  • IRS chief scorched as 'liar' (WND)
  • Big Investors Missed Stock Rally (WSJ)
  • U.K. Jury Finds Coulson Guilty of Conspiracy to Intercept Phone Voice-Mail Messages (WSJ)
  • HSBC to halve countries served by private bank, sells assets (Reuters)
  • Bond Market Has $900 Billion Mom-and-Pop Problem When Rates Rise (BBG)
 
Tyler Durden's picture

Overnight Equity Futures Algos Jittery After Discovering Dubai On The Map





Judging by the surprising reversal in futures overnight, which certainly can not be attributed to the latest data miss out of Europe in the form of the June German IFO Business Climate report (print 109.7, Exp. 110.3, Last 110.4) as it would be naive to assume that centrally-planned markets have finally started to respond as they should to macro data, it appears that algos, with their usual 24 hour delay, have finally discovered Dubai on the map. The same Dubai, which as we showed yesterday had just entered a bear market in a few short weeks after going turbo parabolic in early 2014. It is this Dubai which crashed another 8% just today, as fears that leveraged traders are liquidating positions, have surfaced and are spreading, adversely (because in the new normal this needs to be clarified) to other risk assets, while at the same time pushing gold and silver to breakout highs. Recall that it was Dubai where the global sovereign crisis started in the fall of 2009 - will Dubai also be the place where the first domino of the global credit bubble topples and takes down the best laid plans of central-planners and men?

 
Tyler Durden's picture

Key Events In The Coming Week





This week brings PMIs (US and Euro area ‘flash’) and inflation (US PCE, CPI in Germany, Spain, and Japan). Among other releases, next week in DMs includes [on Monday] PMIs in US (June P), Euro Area Composite (expect 52.8, a touch below previous) and Japan; [on Tuesday] US home prices (FHFA and S&P/Case Shiller) and Consumer Confidence (expect 83.5, same as consensus), Germany IFO; [on Wednesday] US Durable Goods Orders (expect -0.50%, at touch below consensus) and real GDP 1Q anniversary. 3rd (expect -2.0%) and Personal Consumption 1Q (expect 2.0%), and confidence indicators in Germany, France and Italy; [on Thursday] US PCE price index (expect 0.20%), Personal Income and Spending, and GS Analyst Index; and [on Friday] Reuters/U. Michigan Confidence (expect slight improvement to 82, same as consensus), GDP 1Q in France and UK (expect 0.8% and 0.9% yoy, respectively), and CPI in Germany, Italy, Spain and Japan.

 
Tyler Durden's picture

Futures Exuberance On China PMI Fades After Eurozone Composite Drops To 6 Month Lows





Following last night's laughable (in light of the slow motion housing train wreck that is taking place, not to mention the concurrent capex spending halt and of course the unwinding rehypothecation scandal) Chinese PMI release by HSBC/Markit (one wonders how much of an allocation Beijing got in the Markit IPO) which obviously sent US equity futures surging to new record highs, it was almost inevitable that the subsequent manufacturing index, that of Europe, would be a disappointment around the board (since it would be less than "optical" to have a manufacturing slowdown everywhere in the world but the US). Sure enough, first France (Mfg PMI 47.8, Exp. 49.5, 49.6; and Services PMI 48.2, Exp. 49.4, Last 49.3) and then Germany (Mfg PMI 52.4, Exp. 52.5, Last 52.2; Services 54.8, Exp. 55.7, Last 56.0), missed soundly, leading to a broad decline in the Eurozone PMIs (Mfg 51.9, Exp. 52.2, Last 52.2; Services 52.8, 53.3, Last 53.2), which meant that the composite PMI tumbled from 53.2 to 52.8: the lowest in 6 months.

 
StalingradandPoorski's picture

"For many the Bull is short for Bullshit."





New All time highs almost every single day, yet market volumes have literally collapsed. On any given day, you would see an average of 2M eminis (S&P Futures, spoos) trade, and now we are seeing barely 1M trade, sometimes even lower. This has left everyone, including big banks, who are now being forced to lay off traders amid the slowdown, asking the same question: WTF is going on?

 
Tyler Durden's picture

Another Housing Red Light: Furniture Spending Negative For The First Time Since 2012





As we showed a week ago, it is not just the coincident housing signals confirming that the latest artificial bounce has faded, but both upstream and downstream indicators. Specifically, we showed that lumber prices - that one component so critical in the building of new homes and a traditional leading indicator - have cratered. That's the upstream indicator. As for the downstream, we go to Bank of America which finds that not only has home improvement store spending declined substantially since the dead housing bounce peak last summer, but that furniture spending according to BofA estimates, is now once again negative: the first such drop since early 2012.

 
Tyler Durden's picture

The US Housing Market's Darkening Data





When looking at residential real estate, we often tend to focus almost solely on recent price movements in assessing the health of the housing market at any point in time. But as both homeowners and income-earners in the larger economy, of which the housing market is an important component, to really understand what's going on, we need clarity into the larger cycle driving those price movements. The more we look at today's data, the more it looks like that we are in a new type of pricing cycle -- one that homeowners and housing investors have no prior experience with. And the more we learn about the fundamentals underlying the current cycle, the harder it becomes to justify today's home prices on any sustained level. Meaning a downward reversion in home values is very probable in the coming years.

 
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