Thursday, April 24, 2014

Is It Time To Freak Out About U.S. Economy?


U.S. stocks fall; PMI, home sales disappoint
NEW YORK (MarketWatch) — U.S. stocks deepened losses after a pair of disappointing reports on manufacturing and the housing market, putting the S&P 500 and Nasdaq Composite on track to break their six-day winning streaks.
Investors also focused on a batch of mixed earnings releases, while awaiting results after the bell from heavyweights Apple, Inc. and Facebook, Inc.
The S&P 500 SPX -0.20%  fell 3 points, or 0.2%, at 1,876.42. The Dow Jones Industrial Average DJIA -0.13%  slipped 24 points, or 0.1%, to 16,490.41.The Nasdaq CompositeCOMP -0.79%  is down 27 points, or 0.7%, to 4,133.70.
Markit’s preliminary U.S. manufacturing PMI survey is out.
The headline index slipped to 55.4 in April from 55.5 in March.
Economists had estimated the number would climb to 56.0.
Sales of new homes plunge 14.5% in March
WASHINGTON (MarketWatch) — Sales of new single-family homes plunged last month, hitting the slowest pace since July, according to data released Wednesday.
Sales of new single-family homes plunged 14.5% to a seasonally adjusted annual rate of 384,000 last month, hitting the lowest level since July, with drops in three of four U.S. regions.
Economists polled by MarketWatch had expected a March sales pace of 450,000, compared with an originally estimated rate of 440,000 in February. On Wednesday, the U.S. Commerce Department revised February’s sales pace to 449,000.
WASHINGTON (MarketWatch) — Housing is not looking good, that’s for sure.
The new-home sales report is and always has been a volatile report, but 14.5% drops in a single month aren’t easily explained. Not after months of sluggish readings, and in view of mediocre numbers for existing-home sales and low readings of prospective-buyer traffic by builders.
Smoothing out over six months, and the rate of growth in new-home sales is pretty painfully slow given the depths of how far housing tumbled after the Great Recession.
The March report is a particular head-scratcher, seeing how the weather actually improved and mortgage rates have dropped.
http://www.marketwatch.com/story/is-it-time-to-freak-out-about-housing-2014-04-23 New Home Sales Plunge 14.5%; It’s Not the Weather; Steen Jakobsen on Consensus vs. Reality
The Census Bureau report New Residential Sales Report shows sales of new single-family houses in March 2014 were at a seasonally adjusted annual rate of 384,000.
  • Sales are 14.5 percent below the revised February rate of 449,000
  • Sales are 13.3 percent below the March 2013 estimate of 443,000
  • Median sales price was $290,000 vs. $260,900 in February, $257,500 in March of 2013
  • Average sales price was $334,200 vs. $318,900 in February, $300,200 in March of 2013
  • Median sales price was up 11.5% from last month, 12.6% from year ago
  • Average sales price was up 4.8% from last month, 11.3% from year ago
  • New houses for sale was 193,000
  • Supply is 6.0 months at the current sales rate
Sales of new single-family homes surprisingly slid to an eight-month low in March, falling 14.5 percent to a seasonally adjusted 384,000, when economists polled by Reuters had expected to see a reading of 450,000. And although the S&P 500 dipped slightly on the 10 a.m. ET report, many traders were confused about why stocks weren’t hurt more.
“I am surprised that the market wasn’t hurt by that awful home sales number,” wrote Jim Iuorio of TJM Institutional Services. “It has to be that the market needs a couple more numbers to erase the positive vibe, or that the Yellen ‘put’ is still in play. Either way, it is strange.”
Author Piketty: Income Disparity Puts Financial System at Risk Rising income inequality played a role in the financial crisis of 2007-09, and it could so again if we’re not careful, says economist Thomas Piketty, author of “Capital in the Twenty-First Century.” http://www.moneynews.com/Economy/Income-inequality-financial-system/2014/04/22/id/567118/
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