10 Things You Need to Know: May 29, 2024
Key data releases this week include: FHFA House Price Index (Tue), consumer confidence (Tue), Beige Book (Wed), Q1 GDP revision (Thu), pending home sales (Thu), personal income and spending (Fri), and PCE Deflator (Fri).
Haver
May 28, 2024
U.S. house prices ticked up 0.1% m/m in March following a 1.2% rise in February and a 0.1% easing in January, according to the Federal Housing Finance Agency (FHFA) House Price Index. The latest reading was the 18th m/m gain in 19 months. The year-on-year rate of increase eased to 6.7% in March after accelerating to 7.1% in February, well below a high of 18.9% in February 2022.
Bloomberg
May 28, 2024
US consumer confidence unexpectedly rose in May for the first time in four months as views about business conditions and the labor market were less negative. The Conference Board’s gauge of sentiment increased to 102 from an upwardly revised 97.5 in April, according to data out Tuesday. The reading beat all estimates in a survey of economists.
Haver
May 22, 2024
Sales of existing homes fell 1.9% both m/m and y/y to 4.14 million (SAAR) during April from 4.22 million in March, revised from 4.19 million. February sales were unrevised at 4.38 million. Sales remained increased from the low of 3.85 million in October 2023. The Action Economics Forecast Survey expected April sales of 4.16 million units.
Haver
May 23, 2024
New single-family home sales weakened 4.7% (-7.7% y/y) during April to 634,000 (SAAR) from 665,000 in March, revised from 693,000. Despite the decline, the April reading remained up from its November low of 611,000. The Action Economics Forecast Survey expected sales of 675,000 new homes. Sales remained 38.5% below their peak of 1.031 million in October 2020.
Capital Economics
May 23, 2024
India has made impressive progress in raising its share of global high-end electronics exports over the past few years. But worryingly, it has failed to capture any additional market share in the lower-end manufactured goods which are typically more labor-intensive. Part of the problem is that Chinese firms have become more productive by making these goods more capital intensive. This highlights the need for the next government to step up the pace of structural reform.
Barron’s
May 28, 2024
“History suggests that narrow stock market rallies can last for years,” according to Jonas Goltermann, deputy chief markets economist for Capital Economics. “That was the case for both the 1990s dot-com bubble and the late 2010s ‘big tech’-driven rally,” he wrote in a note.
Barron’s
May 28, 2024
While Dow Theory is steeped in history, the divergence between the transports and the broader market may reflect the increased importance of service and technology in the U.S. economy. Some analysts have suggested that semiconductors have supplanted the transports as a better reflection of the economy, as chips are embedded in nearly every component of the broader economy, says Quincy Krosby, chief global strategist at LPL Financial.
Barron’s
May 28, 2024
By week’s end, the CME FedWatch tool had fed-funds futures pricing in just a single one-quarter-percentage-point cut this year, from the current target range of 5.25% to 5.50%. A second reduction isn’t seen by futures traders until the policy meeting at the end of next January, rather than in mid-December, as previously anticipated.
Oxford Economics
May 24, 2024
While inflation expectations continue to rise above their pre-pandemic range, they remain far below where they were last year. This, along with consumers’ expectations that wage growth will slow, is a positive sign for the Fed that inflation is on a sustainable path back to its 2% goal.