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Market Matters

Markets Matters

This was a relatively quiet week for economic data releases, with the market waiting for Fed Chairman Powell’s Jackson Hole speech on Friday. Powell’s speech struck a good, dovish tone but not too accommodative. Trade tensions rose on Friday as China is adding tariffs of 5% to 10% on 75 billion of US goods.


Markit PMI

The prelim Markit PMI numbers for August posted below expectations with the Services PMI dropping -2.1 points to 50.9, while the Manufacturing PMI fell -.5 to 49.9. Again, a print of 50 is considered neutral in the indices and this is the first time since late 2009 that the Manufacturing side is below that mark. These numbers together now suggest annualized growth at roughly +1.5% in August.

Leading Economic Indicators

The Conference Board’s Leading Economic Indicators index for July posted up +.5%, while June’s growth was revised 
to -.1% from a previous -.3%. Looking at the YoY growth rate, the index is at +1.6%, down from +1.7% in June. Within the report, new orders index and hours worked were negative, while there was no contribution from consumer expectations, core capital goods orders, or factory orders. The positive contributors this month came from building permits, fewer jobless claims, and higher stock prices.

Existing Home Sales

Existing Home Sales rose by +2.5% in July to 5.42mln units, now a five-month high. The first uptick in roughly 16 months, the YoY gain in existing sales now prints at +.6%. Single family sales were up 2.8%, while condo and co-op sales were unchanged on the month. YoY, overall home sales are up 0.6%, with single family sales up 1% and condo-coop sales down 3.3%. The NAR noted that “increasing economic uncertainty, low inventories and still high prices in some areas will be impediments to a more rapid sales pace.” At the current pace, we are looking at 4.2 months to clear the supply on the market. The July median home price was up +4.3% to $280,800.

New Home Sales

New Home Sales for July came to an annualized pace of 635k, which missed expectations of 649k. June was strongly revised upwards to 728k from 646k. The YoY growth is at 4.3%, while the highly revised June number had the MoM growth to -12.8%. The median home price was $312,800 for July, while the mean was at $388,000, which is up 9.4% and 2.2% respectively MoM. Looking at the region breakdown, the Northeast was up 50% m/m, Midwest down 11.1% m/m, South down 16.1% m/m, and the West down 14.2% m/m. While July’s sales did fall short of expectations, the strong revisions to June makes this report look pretty strong.