RSS Feed by Calculated Risk on 7/18/2010 11:29:00 AM
Sunday, July 18, 2010
Weekly Summary and a Look Ahead
Three housing related reports will be released this week: the NAHB builder confidence survey on Monday, housing starts on Tuesday, and existing home sales on Thursday. Fed Chairman Bernanke will report to the Senate and House on Wednesday and Thursday, and on Friday, the European bank stress test results will be released.
Here is the daily schedule:
On Monday, the July NAHB homebuilder survey will be released at 10 AM. The consensus is for another low reading at about the same level as June (17).
On Tuesday, Housing Starts for June will be released at 8:30 AM. The consensus is for a decrease to 580K (SAAR) in June from 593K in May. Based on builder comments, I'll take the under again this month.
Also on Tuesday, the BLS will release the Regional and State Employment and Unemployment report for June at 10 AM.
On Wednesday, the AIA's Architecture Billings Index for June will be released (a leading indicator for commercial real estate). Also on Wednesday, the MBA will release the mortgage purchase applications index. This has fallen to the lowest level in over 13 years suggesting weak home sales will be reported in July and later this year.
On Wednesday, starting at 10 AM ET, Fed Chairman Ben Bernanke will report to the Senate Banking Committee: The Semiannual Monetary Policy Report to the Congress
Possibly on Wedneday, the Moodys/REAL Commercial Property Price Index (for May) will also be released.
On Thursday, the initial weekly unemployment claims report will be released. Consensus is for an increase to 450K from 429K last week.
Also on Thursday, the National Association for Realtors (NAR) will release the June existing home sales report. The consensus is for a decline to 5.3 million sales in June (SAAR, seasonally adjusted annual rate), from 5.66 million in May. A key number in the release will be existing home inventory. Inventory has increased year-over-year for the last two months, and this suggests that the months-of-supply will be in double digits later this summer.
Also on Thursday, starting at 9:30 AM ET, Fed Chairman Ben Bernanke will report to the House Financial Services Committee: Monetary Policy and the State of the Economy. The report will be the same as for the Senate, but the Q&A might be interesting.
Also on Thursday, the FHFA house price index, and the Conference Board's index of leading indicators will be released.
On Friday, the Committee of European Banking Supervisors (CEBS) will release the stress test results for 91 European Banks. And the FDIC will probably be busy too ...
And a summary of last week:
On a monthly basis, retail sales decreased 0.5% from May to June (seasonally adjusted, after revisions), and sales were up 4.8% from June 2009.
Click on graph for larger image in new window.This graph shows retail sales since 1992.
This is monthly retail sales, seasonally adjusted (total and ex-gasoline).
Retail sales are up 7.3% from the bottom, but still off 5.2% from the pre-recession peak. Retail sales have declined for two consecutive months. This was another weak report, and the decline in sales was worse than expected.
The Census Bureau reports:
[T]otal May exports of $152.3 billion and imports of $194.5 billion resulted in a goods and services deficit of $42.3 billion, up from $40.3 billion in April, revised.
This graph shows the U.S. trade deficit, with and without petroleum, through May.With oil prices and volumes down, oil imports decreased sharply in May, however other imports - especially from China - increased significantly. Most of the increase in the trade deficit since last year has been related to oil, but now it appears the ex-oil deficit is increasing sharply again.
Note: the lower than expected retail sales, and higher than expected trade deficit, have lead to several key analysts downgrading Q2 real GDP growth to around 2% annualized.
From the Association of American Railroads: Rail Time Indicators. The AAR reports traffic in June 2010 was up 10.6% compared to June 2009 - but traffic was still 10.2% lower than in June 2008.This graph shows U.S. average weekly rail carloads.
From AAR:
On a seasonally adjusted basis, U.S. rail carloads fell 1.3% in June 2010 from May 2010, following a 1.1% decline in May 2010 from April 2010. After bottoming out in May 2009, seasonally adjusted rail carloads trended upward, with some fits and starts along the way, through April 2010. They’ve now declined for two consecutive months. ... an economy several months into a recovery from the worst recession in decades should be yielding rail traffic levels heading north, not south.
This graph shows the national LoanPerformance data since 1976. January 2000 = 100.The index is up 2.9% over the last year, and off 28.5% from the peak.
CoreLogic expects prices to "moderate and possibly decline". I think this index will show a further price increase in June, as tax credit related existing home sales close. But I expect the index will show declines by the end of summer and into the fall.
The Fed reported:Industrial production edged up 0.1 percent in June ... capacity utilization rate for total industry remained unchanged in June at 74.1 percent, a rate 5.9 percentage points above the rate from a year earlier but 6.5 percentage points below its average from 1972 to 2009.This graph shows Capacity Utilization. This series is up 8.7% from the record low set in June 2009 (the series starts in 1967).
Capacity utilization at 74.1% is still far below normal - and well below the the pre-recession levels of 81.2% in November 2007.
From Reuters: Consumer Sentiment Sinks To Lowest in 11 Months The survey's preliminary July reading on the overall index on consumer sentiment plummeted to 66.5 from 76.0 in June.Consumer sentiment is a coincident indicator - and this is further evidence of an economic slowdown.
Best wishes to all.
