Market Matters

This has been another week where rates have been consolidating below 3%. We have a pretty wide range at the moment of 2.71%-3.20% on the 10 year. With the growth slowdown fears that some market participants are expressing, there is a decline in the expected Fed Funds terminal, which makes sense. If the economy slows enough inflation should not be an issue and the Fed will not need to keep raising the Fed Funds rate. Still best to be defensive as this market still is very volatile.

 

Initial Jobless Claims

Initial Jobless Claims fell by -8k to 210k for the week ending May 21st from the prior week's 218k print. The 4-week moving average of headline claims is now at 206.8k, which is running higher than the normal levels of 200k. Continuing claims, which lag by a week, actually rose by +29k to 1.346mln vs. the previous 1.317mln. This puts the 4-week moving average for continuing claims at 1.362mln.

 

Durable Goods Orders

Durable goods orders for April showed growth below consensus, with the headline posting +.4%, and ex-transportation up +.3%. Figures for March were downwardly revised as well, now at +.6% on headline vs. the previously released +1.1% increase. In the April data, shipments increased by +.1%, now posting the 11 out of 12 months of growth. However, this is down considerably from the increase in March of +1.4%. Primary metals were the main drivers of the rise in this category, growing by +.9%. Unfilled orders increased +.5% this month, which was the same as in March. Transportation equipment was the key driving force of the growth at +.7%. Also worth noting, inventories have grown for fifteen consecutive months, now at +0.8%. Nondefense new orders for capital goods increased by +.4%, with ex-air being at +.3%. Shipments in this category grew by +.6%, with unfilled orders increasing +.8%, and inventories rose +.5%.

 

New Home Sales

New Home Sales dropped -16.6% in April to an annualized rate at 591k units vs. the prior revised 709k unit pace in March. Looking year over year, new sales were down -26.9% from April 2021. The median price for a new home sold in April this year was $450,600, an increase of almost +20% from last year. The seasonally adjusted estimate of new homes for sale at the end of April was 444k, which represents a supply of 9.0 months (highest since 2010) at the current sales rate vs. the prior 6.9 months in March. Broken out by region, the Northeast was down -5.9% m/m and up +17.1% y/y; the Midwest down -15.1% m/m and down by -25.5% y/y; the South down -19.8% m/m and -36.6% y/y; and the West down -13.8% m/m and -12.4% y/y.

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