New Home Sales

California Leads Housing Slowdown As Case-Shiller Home Prices Decline For 4 Months In A Row

Following misses in yesterday's Markit Service PMI, Existing Home Sales and the Dallas Fed report, and today's Durable Goods numbers, we just made it a pentafecta for misses in US econ data, when the just released August Case-Shiller data for August confirmed once again that US housing is rapidly slowing down, when the Top 20 Composite Index (Seasonally Adjusted) posted another decline in August, its fourth in a row, declining by -0.15% and missing expectations of a modest 0.2% rebound (following last month's -0.5%) decline. The best summary of the situation came from S&P's David Blitzer: "The deceleration in home prices continues... The Sun Belt region reported its worst annual returns since 2012, led by weakness in all three California cities -- Los Angeles, San Francisco and San Diego." But who cares what the birth (and death) place of every housing bubble is doing, right?

The Housing Recovery Has Been Canceled Due To Data Revisions

It is now beyond stupid: the euphoric, consensus-beating data for every single month since May has been revised lower, by on average 6% and as much as 9%. Perhaps finally people will realize that there is only one number that matters in the Census bureau's monthly new home sales report: the ±15.7 90% confidence interval. Well, people maybe, but not algos, who only care about one thing: whether the data beat or missed.

New Home Sales Miss, August Drastically Revised Lower

Having exploded 18% higher in August (driven by, um, record high prices), September's new home sales printed at 467k (against expectations of 470k) and August's surge to 504k was revised lower to just 466k (busting the biggest beat since 2005 meme) revised 7.5% lower. After August's reported 50% MoM rise in The West, the region saw the rate of sales slow in September. The median new home sales price (at record highs last month) fell 4% YoY to $259,000.

Frontrunning: October 24

  • Doctor with Ebola in New York hospital after return from Guinea (Reuters)
  • Ebola Puts Spotlight on Bellevue, Key NYC Trauma Center (WSJ)
  • Uber Driver Transported Ebola-Positive Doctor in New York (BBG)
  • GOP Gains in Key Senate Races as Gender Gap Narrows (WSJ)
  • ECB Tries for Third Time Lucky in European Stress Tests (BBG)
  • Security tight in Canada as police probe Parliament gunman's ties (Reuters)
  • Why Madrid's poor fear Goldman Sachs and Blackstone (Reuters)
  • Fed’s $4 Trillion Holdings Keep Boosting Growth Beyond End of QE (BBG)

Overnight Futures Fail To Ramp As Algos Focus On New York's First Ever Ebola Case

And just like that, the Ebola panic is back front and center, because after one week of the west African pandemic gradually disappearing from front page coverage and dropping out of sight and out of mind, suddenly Ebola has struck at global ground zero. While the consequences are unpredictable at this point, and a "follow through" infection will only set the fear level back to orange, we applaud whichever central bank has been buying futures (and the USDJPY) because they clearly are betting that despite the first ever case of Ebola in New York, that this will not result in a surge in Ebola scare stories, which as we showed a few days ago, may well have been the primary catalyst for the market freakout in the past month.

12 Charts That Show The Permanent Damage That Has Been Done To The US Economy

Most people that discuss the "economic collapse" focus on what is coming in the future.  And without a doubt, we are on the verge of some incredibly hard times.  But what often gets neglected is the immense permanent damage that has been done to the U.S. economy by the long-term economic collapse that we are already experiencing.  But because unprecedented levels of government debt and reckless money printing by the Federal Reserve have bought us a very short window of relative stability, most Americans don't seem too concerned about our long-term problems.  They seem to have faith that our "leaders" will be able to find a way to muddle through whatever challenges are ahead.  Hopefully the following 12 charts will be a wake up call.

Pending Home Sales Drop In August (After Record Surge In New Home Sales)

Following last week's explosion higher in new home sales (despite surging record high prices), it is somewhat intriguing that pending home sales would tumble over 4.1% YoY, and drop 1.0% MoM (missing expectations of a 0.5% drop) and the 2nd biggest drop in 2014. The 'stunning' rationale for this miss, provided by NAR's chief economist, is... "fewer bargain-priced homes' (which is odd given record prices and record surge in new home sales), and a "rising rate environment" (except rates are collapsing)...

Equity Futures Unchanged As Dollar Surges To Fresh 4 Year Highs

It has been a relatively subdued session, with not much action in either stocks or bonds - European stocks rise for the second day on US market momentum from yesterday; Asian stocks are mixed advance while metals decline with Brent, WTI crude, U.S. equity index futures. The biggest highlight in overnight action, however, was once again the Dollar whick climbed to a fresh 4-year high, on pace to strengthen for 2 straight months for first time since March. The reason: ongoing sentiment that there will be a major dispersion between central banks, with the USD tightening just as other central banks join the liquidity fray. To wit, ECB data showed that lending decline in Europe slowed to -1.5% y/y in Aug. vs -1.6% in July and the latest statement from Draghi who said in Lithuania that economic reform possible without devaluing currency.

New Home Sales Explode Higher Thanks To... Record High Average New Home Prices?

New Home Sales rose a magnificent (seasonally-adjusted annualized rate) 18% in August - the biggest monthly rise since January 1992 albeit with a 16.3 90% confidence interval, meaning the final number may well be +1.7%. At 504k, new home sales are back at May 2008 levels (though obviously massively below the 1.4 million homes sold at the peak in 2005). As a reminder, May's 504K new home sales print was later revieed later to 458K. But even more stunning, new home sales in The West rose a mind-numbing 50% in August (and up 84.4% YoY - nearly double).  And just to confuse matters, the average new home sale price rose to a new record high of $347,900. So as existing home sales are sliding (and prices dropping), new home sales are surging (to new record highs) - makes perfect sense. We await the extrapolations for how great this move is. (or the realization that it is entirely seasonal-adjustment-biased and unsustainable given the realities of mortgage applications).

Frontrunning: September 24

  • A Month of Bombs Dropped in One Night of Strikes on Syria (BBG)
  • Air strikes in Syria hit Islamic State-held areas near Turkey (Reuters)
  • Pimco ETF Draws Probe by SEC (WSJ)
  • Shadowy al Qaeda cell, hit by U.S. in Syria, seen as 'imminent' threat (Reuters)
  • Yellen Warns on Market Calm Before ‘Considerable Time’ Up (BBG)
  • Dudley Says Fed Needs U.S. Economy to Run ‘A Little Hot' (BBG)
  • Websites Are Wary of Facebook Tracking Software (WSJ)
  • Just a joke now: Barclays Fined Twice in One Day for Compliance Failures (BBG)
  • Fired UPS worker kills two supervisors, self, in Alabama shooting (Reuters)

Futures Higher As Lowest German IFO Since April 2013 Prompts More Demands For ECB QE

If yesterday the bombardment, no pun intended, of bad news from around the globe was too much even for Mahwah's vacuum tubes to spin as bullish - for stocks - news, then tonight's macro economic updates have so far been hardly as bombastic, with the only real news of the day has Germany's IFO Business Climate reading, which dropped from 106.3 to 105.8, declining for the 5th month in a row, missing expectations, and printing at the lowest level of since April 2013! (More from Goldman below) Net result: Bunds yields were once again pushed in the sub-1% category, even if stocks today are higher because the European data is "so bad it means the ECB has no choice but to do (public instead of just private) QE" blah blah blah.