Market Matters
The big news of the holiday week is that President Biden decided to renominate Chairman Powell for a second term as Fed Chairman. While this seemed almost a given, the market quickly sold off as the news hit and the sell-off continued. With the holiday week the move higher in rates isn’t that surprising, the real question will be if the sell-off continues into the weekend and if we will get a snap back the following week. While we think the sell-off is overdone a bit, the trend is not our friend, best to be defensive for the time being.
Initial Jobless Claims
Initial Jobless Claims only fell by -69k to 199k for the week ending November 20th vs. the revised level of 270k in the prior week. Continuing claims, which lag by a week, fell -60k to 2.049mln vs. the revised level of 2.109mln from the week before. The 199k for initial claims is the lowest since 1969, although a few economists note that the unusually large drop in claims could be due to seasonal adjustments around the Thanksgiving holiday season.
Existing Home Sales
Existing Home Sales in October rose by +.8% to a seasonally adjusted annualized rate of 6.34mln units according to the National Association of Realtors. Looking YoY, sales were -5.8% lower than October 2020. Within the monthly data, the supply of existing homes for sale continued to weaken with only 1.25mln homes for sale at the end of October. This represents a 2.4-month supply at the current sales pace and is down by -12% compared to a year ago. The weaker supply and continued demand pushed the median price of an existing home to $353,900, which is +13.1% higher compared to October 2020. Investors made up 17% of buyers for the month, up from 13% in September, and is higher than the 14% seen a year ago. All cash buyers represented 24% of the month’s sales, while first-time homebuyers represented 29% of sales compared with 32% the same time last year.
Durable Goods Orders
Durable Goods Orders for the month of October came in -0.5% MoM, missing market expectations of +0.2%. This is October’s pre-liminary reading. Durables ex transportation came in right in line with market expectations of +0.5%. Core capital goods orders that exclude aircraft and military hardware came in +0.6% MoM, which was slightly higher than market expectations of +0.5%. The pickup in core capital goods order show that there is solid momentum for capital investment starting in the fourth quarter.
New Home Sales
New Home Sales in October came in at 745k, missing expectations of 800k. With the revision in September to 742k from 800k, the MoM change was +0.4%. The median sales price of a new home rose 18% from a year prior to $407,700.
