iShares US Home Construction

The April housing starts report was a relief for homebuilders. Their confidence has been struggling. The May report was slightly below the estimate. Consumer spending is still strong after the May retail sales report.

Given the significant setbacks in housing data over the last few months, homebuilders’ confidence has taken a back seat.

When real estate developers or REITs like AvalonBay (AVB) are confident about the economy, they build more in anticipation of future demand from consumers.

The US consumer confidence index recorded its biggest fall in more than three years in December.

The OECD (Organisation for Economic Co-operation and Development) has said that global economic growth has peaked.

The US economy (SPY) (VTI) grew by an annualized rate of 3.5% in the third quarter as compared to economists’ estimates of 3.4%.

For Sherwin-Williams, 64% of the analysts recommended a “buy,” 36% recommended a “hold,” and none of the analysts recommended a “sell.”

The US Census Bureau and Department of Housing and Urban Development report monthly data on the number of new homes sold in the United States.

The United States National Association of Realtors (or NAR) releases a monthly report on the existing home sales (ITB) market.

The HMI was reported to have decreased by two points to 68 in June as compared to a May reading of 70.

Rising interest rates increase the cost of owning a home for prospective buyers, but the housing market hasn’t yet felt the impact of rate increases.

The consumer confidence index has increased to 128.0 in May as compared to a downward revised April reading of 125.6.

As per the recent report, new single-family homes (XHB) sold in April were at a seasonally adjusted rate of 662,000 units.

The US National Association of Realtors (or NAR) releases a monthly report on the existing home sales (ITB) market.

An increase in the number of building permits in any given month is a signal for increased activity in the housing sector (DHI) in the future.

The housing market index was reported to have increased by two points to 70 in May compared to the downwardly revised April reading of 68.

In April, the number of building permits issued was reported at 1.35 million, a decrease of 1.8% from the downward revised March reading of 1.37 million permits.

According to the NAR’s April 2018 report, existing home sales rose 1.1% to a seasonally adjusted annual rate of 5.6 million homes in March.

The US Census Bureau and Department of Housing and Urban Development report monthly data on building permits issued in the United States.

The volatility in housing starts data remains elevated. Housing starts in March were reported to have risen 1.9%.

The HMI (housing market index) was reported to have decreased by one point to 69 in April 2018.

The “Job Openings and Labor Turnover Survey” (or JOLTS) data for February was reported on April 13, and it contains information about job openings and total separations.

The University of Michigan final consumer sentiment for March was reported at 101.7, up by 1.7 as compared to the final February reading of 99.7.

In March, the service sector continued to grow but at a slower pace.

The United States National Association of Realtors (or NAR) releases a monthly report on the existing home sales (ITB) market.

The decrease in building permits spanned across the sectors in February.

Just as markets were celebrating the stellar 9.7% increase in housing starts in January, the February data proved to be a damper for that enthusiasm.

The March housing market index reading is at 70, a one-point decline from the revised February reading of 71.

January’s JOLTS (Job Openings and Labor Turnover Survey) data, which contains information about job openings and total separations, was reported on March 16.

The Conference Board uses the number of building permits issued as one of the key constituents of its LEI (Leading Economic Index) model.

The US Bureau of Economic Analysis (or BEA) has released its second 4Q17 GDP estimate, projecting that the US economy increased at an annual rate of 2.5%.

The United States National Association of Realtors (or NAR) releases a monthly report on existing home sales (ITB).

February’s HMI reading was reported at 72, unchanged from the January reading and two points below the 18-year peak reported in December.

The Conference Board uses the number of building permits issued as one of the constituents of its LEI (Leading Economic Index) model.

According to the January report from NAR, existing home sales decreased 3.6% to a seasonally adjusted annual rate of 5.57 million homes in December.

For 2017, 1,263,400 housing units have been authorized by building permits—a 4.7% increase from 1,206,600 housing units in 2016.

Comments from NAHB members indicated that homebuilders are optimistic about the future demand and projected increased activity in the housing sector.

Building permits and the economy The number of building permits issued each month is a constituent of the Conference Board LEI (Leading Economic Index). The construction and housing industry (PKB) is a major job provider in the economy, and changes in activity in the sector affect employment conditions and aggregate demand. A higher number of building permits is a leading […]

According to the latest report from NAR, existing home sales rose 5.6% to a seasonally adjusted annual rate of 5.81 million homes in November.

For November, the NAHB Housing Market Index was reported as 74—an increase of five from October and an 18-year high.

In November 2017, housing units (XHB) authorized by building permits were at a seasonally adjusted rate of 1.298 million—a decrease of 1.4% from October.

ADP’s jobs report for November was published on December 6. It provided deeper insight into improvements in US employment.

The Conference Board Consumer Confidence Index for November came in at 129.5, up from 126.2 in October.

In October 2017, the number of building permits totaled ~1.3 million permits, a sizeable increase from the September reading of ~1.2 million permits.

According to the latest report from NAR, existing home sales have risen 2% to a seasonally adjusted annual rate of 5.48 million in October.

In October 2017, building permits were at a seasonally adjusted rate of 1.297 million—an increase of 5.9% from the reading of 1.225 million in September.

The University of Michigan Preliminary Consumer Sentiment for November was reported at 97.8, which was 2.9 lower than the final October reading of 100.7.

For October, service sector activity rose at a pace not seen since the inception of the report. The non-manufacturing index reached a lifetime high of 60.1.

Given that markets remain focused on the next Fed chair appointment and US tax reforms, volatility (VXX) could be low after the October jobs report.

In September 2017, building permits were at a seasonally adjusted annual rate of 1.215 million—a fall from August’s 1.272 million and 4.3% below September 2016.

FOMC members noted that labor market conditions could take a hit due to the hurricanes in August and that this was evident in the October non-farm payrolls report.

Besides the upbeat earnings, Home Depot (HD) also significantly increased its returns metrics.

As per the September ADP Employment Report, there was a major drop in the number of jobs created in the trade, transport, and utility sector.

Throughout this series, we’ll look at potential risks facing markets, and how they could impact global financial markets in the short-to-medium term if they end up materializing.

Building permits rise in August The Conference Board Leading Economic Index (or LEI) uses the number of building permits issued as a constituent. The construction industry is one of the key sources of employment in the United States, and the number of building permits gives some insight into future demand for the industry and its […]

The retail sales report for July was released by the United States Census Bureau on August 15. According to the report, US retail sales were $478.9 billion.

US Dollar index reaches a 14-month low The US Dollar Index (UUP) continued with its fall as investors preferred major peers. In the week ended July 21, the US Dollar Index closed at 93.78, falling 1.7% from the week prior. It is headed for its fifth consecutive month of loss this year. Conflicting news from […]

The number of building permits issued in June 2017 stood at 1.25 million, an improvement from May’s 1.17 million.

In this series, we’ll explore the latest data from the Leading Economic Index, one of three composite business cycle indicators released by The Conference Board.

Despite the strong growth in employment numbers, the Fed’s latest monetary policy report had some comments about slow wage growth.

The Fed’s decision had a limited impact on the S&P 500 (SPY), which closed last week at 2,433.2, a gain of 0.06% for the week.

Economic indicators that have been reported since the last FOMC meeting were mixed. We saw March employment data disappoint markets (MTUM).

Trump is unlikely to back down on other election promises that he made during his campaign.

Sherwin-Williams (SHW), in a press release on August 29, 2016, announced Poised Taupe (SW 6039) as its 2017 color of the year.

As central banks buy up more bonds and more bonds move into negative yields, investors search among a smaller pool of substitutes and trades get crowded for higher risk alternatives. According to the Wall Street Journal, higher prices for stocks, bonds, and real estate have caused net wealth to swell to over 500% of national […]

The monthly retail figures for construction (ITB) equipment sales released by Deere & Company (DE) and Caterpillar (CAT) show a continued fall.

Caterpillar’s (CAT) revenue fell by 16.2%, or by $2 billion year-over-year, to $10.3 billion in 2Q16 compared to analysts’ consensus estimates of $10.1 billion.

Stanley Black & Decker (SWK), the world’s leading toolmaker, declared its 2Q16 earnings before the Market opened on July 22. SWK stock closed 4.8% higher on the day of the earnings release.

United Technologies’s (UTX) Otis segment, which accounts for ~20%–22% of the company’s revenues every year, is the world’s largest elevator manufacturer. This segment has the best margins of the company’s operating units.

A number of factors have contributed to the slowdown, including soft overseas growth and a sharp drop in capital spending by energy and mining companies.

Deere’s (DE) construction and forestry segment generated revenues of $5.9 billion, $6.6 billion, and $6 billion, respectively, in 2013, 2014, and 2015.

Stanley Black & Decker (SWK) derives more than half of its tools and storage sales from the United States, making it the company’s largest regional market.

For the last few years, the world has been in the midst of a major demographic transition, which has affected the world economy. The aging population is one of the most visible global trends

In the second quarter, Lennar’s (LEN) gross margins fell 190 basis points sequentially to 22.7%.

Honeywell (HON) provides control solutions for various residential and industrial applications through the Honeywell Automation and Control Solutions–ACS unit.

But though millennials may have been born into unlucky economic circumstances, they seem to also be transforming their luck.

If millennials aren’t buying homes or cars and aren’t able to save for retirement, this trend will hurt the economy.

Home Depot (HD) reported record results in fiscal 2016. Sales reached a new high of $88.5 billion in fiscal 2016, up 6.4% year-over-year (or YoY).

Lowe’s (LOW), announced that it had entered into a definitive agreement to acquire Canada’s largest home improvement retailer, Rona (RON.TO).

The Home Depot’s (HD) focus on the pro customer allows the retailer to compete in the installations market and the product demand the services create.

Driving growth from sales to pro customers is a key growth opportunity for the world’s largest home improvement retailer.

The National Association of Realtors’ data showed that, on average, properties stayed on the market for 58 days before they were sold to buyers.

With a rise of 7.6% YoY (year-over-year) to $224,000, December 2015 was the 46th consecutive month of YoY increases in median home prices.

All four major regions of the country witnessed substantial increases in home sales in December 2015. The charge was led by the Northeast and Midwest.

Lowe’s stock price performance has underperformed the overall consumer discretionary sector.

Lowe’s is also experimenting with the idea of rolling out other smaller format stores like City Center stores in other under-penetrated and high-density urban areas in the US.

Lowe’s sources its merchandise from over 7,000 suppliers with no supplier accounting for more than 6% of sales.

A professional customer is one who’s looking for products to complete projects for other customers.

Lowe’s (LOW) operates in the home improvement retail industry. The company competes with a number of retail and wholesale players.

The US dollar index was trading on a flattish note on January 20, with a slight rise of 0.10% for the day. In the end, the index closed the day at 99.09.

Average hourly earnings fell by 1 cent on a month-over-month basis in December 2015 and were up 2.5% year-over-year to $25.24. Average weekly hours were flat at 34.5.

In December 2015, non-farm payrolls increased by 292,000, easily topping Wall Street’s estimate of 200,000.

Housing has been a bright spot in the US economy. But over the past month, housing stocks haven’t been performing well. ITB, a housing-focused fund, has fallen 4.7%.

The US Dollar Index measures the strength of the US dollar against the other major currencies. It fell by 0.13% on December 22, 2015.

Lennar showed mixed results compared to its peers based on the PE and PBV ratios. The ETFs outperformed Lennar based on the PE and PBV ratios.

Achieving maximum employment is one of the dual mandates assigned to the Fed by Congress. The Fed definitely sees labor market signals as warranting a rate hike.

According to the National Association of Home Builders (or NAHB), the housing market index fell by a single point to reach a level of 61.0 in December.

The price-to-sales ratios of Toll Brothers, D.R. Horton, NVR, PulteGroup, and M.D.C. Holdings are 1.5x, 1.1x, 1.3x, 1.1x, and 0.68x, respectively.

The US Dollar index was trading in a narrow range on November 18, 2015. The slight movements down were mainly due to housing data coming out on a mixed note and the FOMC minutes.

Wall Street analysts’ consensus sales expectations for 3Q16 exceeded the high end of the company’s projected guidance range for fiscal 2016.