US DATA: Existing Home Sales Market Tightening Very Slightly, But Still Loose
Sep-25 14:36
Existing home sales totaled 4.00M in August on a seasonally-adjusted, annualized basis, per the National Association of Realtors. This was a little above the expected 3.95M, though a small decline from July's 4.01M.
- The 6-month average for sales is exactly 4.00M, so this report merely confirms the recent trend (or lack thereof) in sales activity, which remains about 25% below 2019 (pre-Covid) levels.
- Regional performance was mixed, with sales declining in the Northeast and South, and picking up in the Midwest and West.
- Prices ticked up 2.0% Y/Y to $422,600, with gains averaging 1.7% over the last 6 months and remaining about
- Inventories were a little softer NSA (1.53M), with the months of supply falling to a 3-month low 4.59 from 4.64 prior - but that's still wel above the sub-2 lows coming out of the pandemic.
- As such the market has tightened slightly from the loosest levels seen recently, but remains loose by historic standards and the broader trend is toward further loosening.
- It also suggests the big jump in New Home Sales for August was an outlier. In any case, existing home sales are five-fold those of new sales (4M vs 800k), making them much more important for transaction activity.
- Lower mortgage rates seen in recent weeks could help buoy activity but affordability remains limited. The NAR's chief economist writes hopefully, "The ever-so-slight improvement in housing affordability is inching up home sales. Wage growth is now comfortably outpacing home price growth, and buyers have more choices."
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US DATA: Continued Weak Consumer Sentiment As Inflation Concerns Linger
Aug-26 14:23
The Conference Board's survey of consumer confidence showed slightly better than expected sentiment in August, but actually dimmed slightly vs an upwardly-revised July. While "soft" indicators of consumer activity haven't been particularly reliable in gauging actual underlying activity in recent years, by the same token there is no evidence here of an imminent resurgence in consumption.
- The headline consumer confidence composite index of 97.4 was better than the 96.5 expected but meant a decline from an upwardly revised 98.7 in July (97.2 prev est). Similarly, expectations (74.8 vs 76.0 prior) and present situation (131.2 vs 132.8 prior) saw slight relapses in August after improvements both outright and upwardly revised in July.
- The present situation print was a 4-month worst, with evidence of a deterioration in the labor market (as noted elsewhere) helping subdue sentiment. Assessments of families' current and expected financial situations were slightly stronger in August vs July, but outlooks for income prospects were less positive and there was a tickup in expectations of the US facing a recession in the next 12 months.
- It also came alongside a reacceleration in inflation expectations: at 6.2%, the average 12-month ahead expectation is a 3-month high (5.7% prior), with median expectations back above 5.0% (5.1%, 4.7% prior) for the first time in 3 months. The report noted “Consumers’ write-in responses showed that references to tariffs increased somewhat and continued to be associated with concerns about higher prices. Meanwhile, references to high prices and inflation, including food and groceries, rose again in August."
- We note that the UMichigan August survey also saw a slight rebound in 1-year inflation expectations.
- Instead of sharp improvement after seeming relief over policy uncertainty including tariff "deals" made through early August and the passage of the administration's signature fiscal bill in early July (survey cut-off date was Aug 20), the main aggregates appear to be settling into subdued ranges. Indeed as the report notes, the expectations gauge remained below the 80 mark that "typically signals a recession ahead" (it's been <80 for 7 consecutive months now).
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Aug-26 14:18
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PIPELINE: Corporate Bond Update: $500M BOC Aviation 5.5Y Launch, Ontario on Tap
Aug-26 14:15
- Date $MM Issuer (Priced *, Launch #)
- 08/26 $500M #BOC Aviation 5.5Y +58
- 08/26 $500M #Mitsui & Co 5Y +63
- 08/26 $500M JERA Co 5Y +115a
- 08/26 $Benchmark OCBC 10NC5 +115a
- 08/26 $Benchmark Ontario 5Y SOFR +54a
- 08/26 $Benchmark Sempra 30.5NC5.25 6.75%a
- 08/26 $Benchmark Bank Saudi Fransi 10NC5 +235a
- Expected Wednesday:
- 08/27 $2B ESM 2030 WNG +42a
