Home Prices Down, Sales Up

Good Morning Everyone!

Remember, no one gets rich panic selling.

Prices as of 4 pm EST, 9/27/22; % YTD

MARKET UPDATE

US home prices finally decline

Avg home price (20-largest cities) dropped by 0.44% in July
First decline since December 2011
Breaks 126-month streak of rising prices

YoY price gains continue decelerating:

Unexpected surge in New Home Sales

Massive surprise jump of +28.8% (vs. -2.2% expected)
New home sales now at pre-pandemic levels

To keep an eye on: homes under construction at elevated levels
- Should lead to sharp increase in inventory
- Increase in inventory should put further pressure on new home prices

Trade deficit decreased to $87.3 billion in August from $90.2 billion)

Retail Inventories ex auto +0.3% MoM (prev +0.3%)

Wholesale Inventories +1.3% MoM (prev +0.6%)

Day ahead:

5 Fed speakers: Bostic (8:35 am EST) , Bullard (10:15 am), Powell (10:15 am), Bowman (11 am), Evans (2 pm)
10:00 am - Pending Home Sales
10:30 am - EIA stocks change

Gilts jump on BOE intervention

UK bonds rally on BOE decision to make temporary purchase of long-dated government bonds, put off reducing size of balance sheet
Will buy bonds from Wednesday to Oct 14
QT start pushed back to Oct 31

US10YR yield rises above 4% for first time since 2008

Crude $80

New report shows US on track to grow production faster than government forecast
12.85 million barrels of crude per day - 250k more than EIA forecast

Apple AAPL bails on plans to increase production

Will produce roughly same number of handsets in H2 2022 as same period last year
- In line with original forecast
Had recently upgraded sales forecast ahead of iPhone 14 release
Smartphone market expected to shrink 6.5% to 1.27 billion units in 2022

Earnings

Cintas CTAS
Paychex PAYX
Thor Industries THO

CRYPTO UPDATE

Powell talks DeFi:

We need to be very careful about how crypto activities are taken within the regulatory perimeter, where ever they take place […] there is a real need for more appropriate regulation.