But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
Seasonality Trumps The Bond Market Rally
The MBA Purchase Index decreased 6.9% in the week ended December 12, 2014, despite a strong bond market rally.
Industrial production is a good top-down macroeconomic indicator. It helps forecast the labor market, final demand, consumption, and inflation.
Business inventories are important economic drivers, especially when they build. Historically, recessions start with an inventory buildup.
Manufacturing output increased 1.1% in November. Durable goods’ production increased 1%. Auto-related manufacturing increased as well. Business equipment increased 1.2%.
The Empire State Manufacturing Survey is put out by the New York Fed. It covers a wide range of economic indicators. It also asks businesses to provide a six-month outlook.
Perceptions of the economy are highly negative—32% positive versus 68% negative. The perception of whether it’s a good time to buy is also highly negative, at 37% positive versus 63% negative
Mortgage rates feed the housing market Mortgage rates are the lifeblood of the housing market. This is why the Fed began quantitative easing in the first place. Lower rates allow homeowners to…
We’re entering the seasonally slow period for the real estate sector that pretty much lasts as long as football season. For mortgage bankers, this could be a tough season.
The long-term story for builders is fantastic. We’ve underbuilt for more than a decade, and household formation has been depressed.
Toll Brothers’ 39% increase in earnings is impressive. However, these are not apples-to-apples comparisons due to the Shapell acquisition.
The prospect of a return to low- to mid-single-digit average selling prices (or ASPs) is one reason Wall Street was spooked at the quarter’s results.
Toll Brothers reported numbers that matched Wall Street on revenues, but it reported that contract signings were up. This made investors worry that the growth trajectory of the builder is waning.
Toll Brothers caters to move-up, empty-nest, active-adult, age-qualified, and second-home buyers in the United States. It currently operates in 19 states. Typical customers of Toll Brothers haven’t been immune to the slowdown.
The overall drop in foreclosure activity over the past year is good news for homebuilders. Currently, gross margins are experiencing seven-year highs.
The average 30-year fixed-rate mortgage increased 24 basis points to close at 4.14%. The ten-year bond fell and yields increased by 15 basis points.
Since foreclosures represent a process that may or may not wind up with the bank owning the home, foreclosure completions are a better indicator of foreclosure activity than foreclosure starts.
Manufacturing activity is a good sign for job growth. Job growth has been the Achilles’ heel of this recovery. Although manufacturing isn’t the economic driver it used to be, it still matters.
The index of overall activity fell to 58.7 in November—an decrease of 0.3%. The overall activity was 59 in October. Production drove the increase. Production increased from 64 to 64.4.
Construction spending doesn’t have to be simply residential, or private, construction. Public construction also matters. But it’s less than half of private construction dollars.
Following the collapse, we saw starts average ~687,000 units per year with a low of under half a million. That’s a tremendously depressed level.