Morning Report: New Home Sales up big

Vital Statistics:

 LastChange
S&P futures3629-7.6
Oil (WTI)45.470.31
10 year government bond yield 0.85%
30 year fixed rate mortgage 2.78%

Stocks are flattish this morning despite positive COVID-19 vaccine news. Bonds and MBS are flat.

Today is Cyber Monday and investors are hoping that it will offset the weakness we saw on Black Friday, where traffic was down 50% due to the pandemic. That said, retailers are expecting a robust holiday, with spending expected to rise 3.6% according to the National Retail Foundation.

We will have a lot of data and Fed-speak this week as we enter the final month of 2020. Data-wise, we have construction spending, the jobs report, and PMI data. Jerome Powell will be speaking Tuesday and Wednesday.

New home sales rose 23% YOY to 999,000 in October, which was more or less flat with September’s million unit print. As a general rule, new home sales can be a volatile number and I kind of thought September’s big print would be revised away. Turns out, it wasn’t. This will be an under-appreciated economic boost to the country going forward. Housing is back.

Janet Yellen is Biden’s nominee for Treasury Secretary. She will be confirmed easily, as she is liked by the banks and is a known quantity. She is considered a bipartisan pick, and will advocate for additional federal spending to combat the economic weakness caused by COVID.

Pending Home Sales fell 1.1% in October, according to NAR. “Pending home transactions saw a small drop off from the prior month but still easily outperformed last year’s numbers for October,” said Lawrence Yun, NAR’s chief economist. “The housing market is still hot, but we may be starting to see rising home prices hurting affordability.”

Author: Brent Nyitray

In the physical sciences, knowledge is cumulative. In the financial markets, it is cyclical

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