Rover's Weekly Market Brief — 6/22/2018

Indices

DJIA: 24,580.90 (-2.03%)

NASDAQ: 7,693.00 (-0.69%)

S&P 500: 2,755.00 (-0.89%)

Commodities

Gold: 1,272.10 (-0.50%)

Copper: 302.15 (-3.91%)

Crude Oil: 69.23 (+6.41%)

Economy

Housing starts rose +5.0% in May to a seasonally adjusted annual rate (SAAR) of 1.35 million, up +20.3% from May 2017. New construction rose in the Midwest by +62.2%, and fell in all other regions, with a -0.5% drop in the West, a -0.9% drop in the South, and a -15.0% drop in the Northeast, although starts for single family homes rose in the Northeast by +10.2%. A -14.1% drop in completed multifamily homes decreased the influence of a +11.0% increase in single family home completions to bring the overall national rate of home completions up +1.9% (+10.4% Y/Y). New construction permits were down -53,000 (-4.6%) nationally, with drops in the South (-99,000, -13.9%) and West (-16,000, -4.6%) overcoming increases in the Northeast (+40,000, +42.1%) and Midwest (+6,000, +7.2%), and possibly reflecting a drop in builder confidence due to increasing materials costs.

The National Association of Realtors reported that rising prices and a lack of inventory contributed to drop in existing home sales of -0.4% in May, with sales down -3.0% Y/Y in the third consecutive month of yearly declines. Housing inventory was up +2.8% in May compared to April, but down -6.1% Y/Y in the 36th consecutive month of yearly declines. Median home prices were up +4.9% in their 75th consecutive month of Y/Y increases, bringing the median home price to an all time high of $264,800. The highest proportion of sales were in the South, at a 2.32 million SAAR (unchanged Y/Y), followed by the Midwest (-2.3%, 1.26 million), the West (-4.1% Y/Y, 2.32 million), and the Northeast (+4.86% Y/Y, 0.688 million). On a yearly basis, median home prices dropped in the Northeast (-1.8% to $275,900 median), but rose in the West (+7.2% to $395,800), the South (+4.5% to $233,100), and the Midwest (+4.2% to $209,000).

In the Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey, the diffusion index for general business activity, which measures the differential between respondents with increasing and decreasing activity, fell by an unexpectedly large 14.5 points to 19.9, indicating continued expansion, but with a moderation in pace. The diffusion index for new orders fell by -23 points, with 38% of surveyed firms reporting an increase in orders while 20% reported a decline. Delivery times decreased from an index of 18.5 to 9.6, and shipments increased from 25.8 to 28.7, both of which helped drop the backlog of unfilled orders from 15.3 to -2.7. The index for the average employee workweek dropped 10.2 points to 24.2, while the index for the number of employees remained relatively stable with 33.5% of respondents increasing the number of their employees while 3.1% planned on decreasing. Looking forward to plans over the next six months, the index for capital expenditures increased 14.9 points to 36.5, with 41.3% of respondents planning on increasing expenditures vs. 4.8% planning a decrease.

Upcoming Economic Reports:

Thursday June 28 – GDP, Final Estimate, 2018 Q1

Friday June 29 – Personal Income and Outlays

Earnings Calendar:

 

Monday Tuesday Wednesday Thursday Friday
Carnival
(CCL)
IHS Markit
(INFO)
General
Mills
(GIS)
Nike
(NKE)
Constellation
Brankds
(STZ)
Sorrento
Therapeutics
(SRNE)
Lennar
(LEN)
Paychex
(PAYX)
Accenture
(ACN)
Bionik
Laboratories
(BNKL)




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