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Market Matters

The spread of a new coronavirus in China and the start of President Trump’s impeachment trial have held most headlines this past week.

 

Existing Home Sales

Existing Homes Sales in December rose by +3.6% to 5.54mln seasonally adjusted selling rate. Looking back at 2019, the average selling rate came in at 5.34mln, still well affected by a lack of inventory in the mid-price range homes, thus limiting the rise in sales. Looking at sales by region, the Northeast rose by +5.7%, up +8.8% YoY, sales in the Midwest fell -1.5%, up +9.2% YoY, the South rose +5.4%, up +12.4% YoY, and the West was up as well, +4.6% and +10.7% YoY. The monthly supply fell to 3 months from 3.7 months, now at an
all-time low, with the median price at $274,500, up +7.8% YoY.

 

FHFA Home Price Index

The FHFA Home Price Index for November rose +.2% from the previous month, pushing house prices +4.9% YoY. Within the nine census divisions, seasonally adjusted monthly house price changes from October 2019 to November 2019 ranged from -.1% in the Mountain division, to +.8% in the East North Central division. The 12-month changes were all positive, ranging from +3.8% in the New England and the West
South-Central divisions, to +6.3% in the Mountain division.

 

Leading Economic Indicators

The Conference Board’s Leading Economic Index fell
by -.3% vs. consensus of a -.2% drop. We also saw a revision to November’s print from flat to now +.1%. According to the report, the Conference Board noted that manufacturing indicators remain weaker, but did say that financial conditions and the outlooks from consumers remain in a positive state. While some sectors saw some positive contributions, there were negative contributions that accounted more for the drop in the headline number. Those included unemployment claims, a decline in the ISM new order index, and a decline in building permits.

 

Coronavirus in China

Most of the world continues to put their focus on China and the news this week of a new flu-like virus that has begun to spread throughout the country. The number of Chinese that face travel restrictions within the country has grown to tens of millions as the death toll has risen to 25 and the number of infected to more than 800. After convening to discuss the virus, the World Health Organization's President said the group decided, "this is an emergency in China, but it has not yet become a global health emergency." As global investor fears and uncertainty set in, we’ve seen equity markets falter this past week, while bond markets have traded lower in yields.

 

Impeachment Trial of President Trump

Democratic impeachment managers started their allotted 24 hours this week to argue their case for impeaching Donald Trump. The 24-hour period is spread over 3 days. President Trump’s legal team will then have the same amount of time to present the President’s defense. Senators will then have 16 cumulative hours to ask questions of the House managers and defense team. The Senate will then get to vote on whether to produce documents and witnesses in the trial for which both Republican and Democratic lawmakers have been pushing. As of now, it is highly unlikely that 2/3s of the GOP Majority Senate will vote to remove a Republican President.