New Home Sales

Case-Shiller Says "Housing Recovery Is Faltering" Despite December Home Prices Jumping Most Since March

Home prices, according to Case-Shiller, rose 0.87% MoM in December (better than the expected 0.6% gain) for the biggest seasonally adjusted monthly gain since March, likely bringing the 'housing recovery is back on track' meme back into play (despite affordablity being a major driver of the slump in home sales). However, non-seasonally-adjusted the rise was a mere 0.1%, which nonetheless managed to snap the 3 consecutive months of sequential price declines.  And yet, despite all this, Case Shiller was anything but optimistic: “The housing recovery is faltering. While prices and sales of existing homes are close to normal, construction and new home sales remain weak. Before the current business cycle, any time housing starts were at their current level of about one million at annual rates, the economy was in a recession”

Key Events In The Coming Week: All Eye On Yellen's Testimony To Congress

With Greece moving to the, ahem, periphery if only for a few days/hours, this week the US calendar returns to the forefront with Fed Chair Yellen’s semi-annual monetary policy testimony before the Senate Banking Committee tomorrow night and the House Financial Services Committee on Wednesday, which the market will be paying very close attention to for the reconciliation of how the Fed plans to continue on its rate-hiking path despite rapidly deteriorating US macro data that has started 2015 at the worst pace (in terms of downside surprises) since Lehman.

Initial "Greek Euphoria" Ends As Market Digests Road Ahead For Europe

If you thought the Greek tragicomedy is over, you ain't seen nothing yet, because despite the so-called Friday agreement, the immediate next step is for Greece to submit its list of reform measures to the Troika, which will almost certainly result in an immediate revulsion in Germany's finance ministry, and lead to another protracted back and forth between the Troika and Greece, which may once again well end with a Grexit, especially if the Greek liquidity situation, where bash is bleeding from both the banks and the state at a record pace, remains unhalted.  It is therefore not surprising that the ongoing decline in the EURUSD since the inking of the agreement, and the fact that the pair briefly dipped below 1.13 this morning - over 100 pips below the euphoric rip on Friday - is a clear indication that the market is starting to realize that absolutely nothing is either fixed, or set in stone.

Market Wrap: All Eyes On Yellen Who Better Not Disappoint

While all the algos are programmed and set to scan today's FOMC statement for whether both "patient" and "considerable time" are still there (as it did last time when it supposedly sent a pseudo-hawkish message while telling Virtu and Getco to buy, buy, buy), the market is torn between the trends observed in recent days: on one hand finally succumbing to the adverse impact of USD strength, which overnight also saw the Singapore Dollar admit defeat in the ongoing currency wars, is crushing both revenues and EPS, as well as outlooks, for the bulk of US companies, even as millennials - long since given up on buying a house - allocate their meager savings to the annual incarnation of Apple's flagship product as seen in yesterday's record, blowout numbers by AAPL which is up 8% in the premarket and sending Nasdaq futures soaring compared to the stagnant DJIA or S&P. And then there is Europe where the mood is decidedly sour this morning, with Greece imploding on fears Tsipras really means business and concerns the Greek "virus" may spread to other peripheral nations whose bonds have also seen a lack of a bond bid this morning.

Seven Consecutive Downward Reivisions To New Home Sales Data Place Serious Doubts On Report Accuracy

You will pardon us if we don't "buy" the latest attempt by the Census Department to telegraph housing euphoria with the just reported number of 481K new December home sales, a surge of 11.6% compared to November, an increase which was expected by the consensus to be only  2.7%. In fact, the 481K print is now the "highest" since June of 2008. The reason for our disbelief? Because as we have been tracking for the past 6, and now 7 months, every single such euphoric print since May of 2014 has been revised substantially lower after the fact (and after the headline-scanning algos promptly gobbled up stocks on the initial "beat"), and sure enough, the November print of 438K, was also just "revised" downward to 431K.

Market Wrap: Futures Tumble On Spike Of "Strong Dollar" Earnings Disappointments And Profit Warnings

Following yesterday's earnings disappointments, most notably from Microsoft which is down 7% this morning following the usual after-the-fact downgrades from JPM, Citi and Nomura, futures were already on a the back foot heading into this morning - no doubt impacted by the deja vu ridiculous move in the EURCHF noted earlier - when the latest batch of earnings just hit, of which Dow component Procter and Gamble stood out and which missed the top and bottom line.  But the punchline, and in direct refutation of what Jack Lew said previously about a strong dollar being good for the US economy, was this:"The outlook for the year will remain challenging. Foreign exchange will reduce fiscal 2015 sales by 5% and net earnings by 12%, or at least $1.4 billion after tax." In other words, P&G will "offset" the surge in the USD with more layoffs. So when Jack Lew said "good" he really meant "bad."

Market Wrap: Global Risk Rattled By Syriza Surge To Power

This morning both the SNB stunner from two weeks ago, and the less than stunning ECB QE announcement from last Thursday are long forgotten, and the only topic on markets' minds is the startling surge of Syriza and its formation of a coalition government with another anti-bailout party - a development that many in Europe never expected could happen, and which has pushed Europe to the bring of the unexpected yet again. And while there is much speculation that this time Europe is much better positioned to "handle a Grexit", the reality is that European bank balance sheets are as bad if not worse than in 2014, 2013, 2012 or any other year for that matter, because none of ther €1+ trillion in NPLs have been addressed and the only thing that has happened is funding bank capital deficiencies with newly printed money. You know what they say about solvency and liquidity.

'Pin' Meet 'Housing Bubble 2.0'

The 30 Year U.S. Treasury bond yield hit 2.35% yesterday. Long term interest rates are not controlled by Yellen. They reflect the economic prospects of the country. When they are rising it means the economy is doing well. When they are plummeting to all time lows, the economy is either in recession or headed into recession. Take your pick. No amount of government data manipulation, feel good propaganda spewed by the captured mainstream media, or Ivy League educated Wall Street economist doublespeak, can change the fact this economy is in the dumper and headed much lower. The Greater Depression is resuming its downward march toward inevitable war.

Sayonara Global Economy

The surreal nature of this world as we enter 2015 feels like being trapped in a Fellini movie. The .1% party like it’s 1999, central bankers not only don’t take away the punch bowl – they spike it with 200% grain alcohol, the purveyors of propaganda in the mainstream media encourage the party to reach Caligula orgy levels, the captured political class and their government apparatchiks propagate manipulated and massaged economic data to convince the masses their standard of living isn’t really deteriorating, and the entire façade is supposedly validated by all-time highs in the stock market. It’s nothing but mass delusion perpetuated by the issuance of prodigious amounts of debt by central bankers around the globe. But now, the year of consequences may have finally arrived.

Home Prices See Biggest Monthly Drop Since Polar Vortex As Case-Shiller Declines For Second Month

Case-Shiller's 20-city home price index dropped 0.1% MoM in October (on an unadjusted basis) - the second monthly drop in a row and biggest drop since the Polar Vortex. Year-over-year, home prices rose 4.5% - the weakest growth since October 2012. While this modestly beat expectations (+4.5% vs +4.4% exp.), it is the 11th month in a row of growth deceleration. Also of note: the Top 20 Composite index is now down for the second month in a row, dropping to 173.36. The question now is whether the downside momentum will pick up.

The Housing Recovery Remains Cancelled Due To 6 Months Of Downward Revisions

Following last month's surge to record high home prices, it is perhaps no surprise that for the 6th month in a row, home prices have been revised lower. New Home Sales printed 438k, down from prior revised lower 445k and missing expectations of a surge to 460k... missing for 8 of the last 10 months. However, the key focus should be on the epic revisions of the (by now useless) home sales. For the period May - November, the initial new home sales prints amount to 2.779MM houses. Post revision, the number plunges by 22% to 2.168K. There goes the housing pillar of recovery (let's hope economists are wrong and rates don't rise next year eh?)

Frontrunning: December 23

  • Christmas rally enters sixth day in Europe (Reuters)
  • Downing North Korea's Internet not much of a scalp (Reuters)
  • North Korean Internet Access Restored After Hours-Long Outage (BBG)
  • At U.N. council, U.S. calls life in North Korea 'living nightmare' (Reuters)
  • Ukraine Cuts Gold Reserve to Nine-Year Low as Russia Buys (BBG)
  • De Blasio Seeks to Heal Rifts With Police After Officers Slain (BBG)
  • Oil steady around $60 on hopes of strong U.S. data (Reuters) - so it fell below $60 because...
  • Australian Dollar Hits Four and a Half Year Low on Chine Growth Worries (Reuters)

Economic Data Bonanza Set To Send Algos Spasming To Recorder Highs

With the wind down of the record 2014 trading slump now in its final days (although judging by volumes throughout the year one may have a difficult time noticing just when the holidays began and ended), the already entertaining zero-liquidity market moves are sure to provide further amusement today in the context of the US economic data bonanza on deck, which includes Durable Goods, GDP, Personal Income and Spending, Richmond Fed, UMich, and New Home Sales. Beat or miss, all of the above are guaranteed to send the S&P to higher recorder highs because in the multiple-expansion euphoria blow-off top phase nobody cares about such trivia as fundamentals or the economy, especially when Japan and Germany are about to monetize all of their gross issuance. Just remember to occasionally keep an eye on the preferred rigging correlation pairs: the USDJPY and the VIX, whose every illiquid jerk will be followed by Citadel & NYFed's algos tic for tic.