Market Matters

The week was filled with headlines ranging from Saudi oil attacks to another 25bps rate cut by the Fed. In between, we saw a few top tier data points on housing and manufacturing, again portraying what has been a mixed bag of economic insight.

Housing Starts/Permits

August Housing Starts rose by +12.3%, while permits rose by +7.7%. Driving both headline numbers higher were 
single-family starts, up +4.4%, while multi-family starts rose a strong +32.8%. Looking year-over-year, single-family starts are up +2.1% with multi-family up +16.7%. Building Permits also look to have been given a boost by the multi-family side in August’s data, up +13.3%. Single-family permits were also better, up +4.5%. Year-over-year, single-family permits are down -.6%, while multi-family are up +22.2%.

Existing Home Sales

Existing Homes Sales for August rose by +1.3% to 5.49mln vs. the prior 5.42mln. This is the highest level since back in March 2018. The median sales price is now +4.7% higher than a year ago at $278k. Single-family sales were up +1.2%, while 
multi-family sales were up +1.7%. Looking by region, sales in the Northeast rose +7.6%, the Midwest rose +3.1%, the South up +.9%, and the West declined by -3.4%. Looking 
year-over-year, overall home sales are higher by +2.6%, with single-family up +2.9% and multi-family sales unchanged.

Leading Indicators

The Conference Board of Leading Economic Indicators posted a flat print for August, following a prior gain of +.4% back in July. The largest contributor was building permits, while the largest negative was in new orders. The Board noted that “the trends in LEI are consistent with a slow but still expanding economy…driven by strong consumer spending and robust job gains.”
 

FOMC Statement

The Fed Statement and SEP (set of economic projections) were only modestly changed in yesterday’s announcement. After inducting another 25bps rate cut, the dot plot showed the ‘median’ of the Committee expects no additional rate cuts from here. Shortly thereafter, Fed Chair Powell gave a pretty concise press conference. He noted that the rate cut was ‘insurance against ongoing risks’ and added that ‘policy is not on a preset course’. When asked about if he saw this cut as a ‘mid-cycle adjustment’, he noted that ‘we see favorable economic outlook, though there are risks to the positive outlook due particularly to weak global growth and trade developments, and if the economy does turn down, then a more extensive sequence of rate cuts could be appropriate.’ Overall, the Statement and comments from Powell were 
non-committal and that was viewed as more hawkish. In reaction, Treasury yields came off their lows, while stocks continued to sell off.