At least durable goods are up, but it’s not much comfort on the heels of news that new home sales unexpectedly sank in February. ETFs are taking a spill in kind.
For the fourth consecutive month, sales of brand-new homes dropped a surprising 2.2% to a record low. Many analysts expected home sales to increase by nearly that much. Naturally, it further underscores the fact that the recovery in real estate will be slow and spotty. iShares Dow Jones U.S. Home Construction (ITB) hasn’t reacted much so far today, trading flat.
In better news is durable goods, which rose 0.9% last month. Durable goods include machinery, aircraft, autos and electronics. The increase was the third one in four months. Breaking it down, machinery and civilian aircraft orders were up, while autos, defense goods and electronics orders declined. Rydex S&P Equal Weight Industrials (RGI) is down 0.4% this morning.
Japan could soon get a boost. The stagnant nation today passed a $1 trillion budget aimed squarely at supporting the economy. The government also made a surprise move and said it would keeps its stake in the country’s postal baking system. The system has been blamed for inefficiencies and distortions in Japan. iShares MSCI Japan (EWJ) is down 1.5% this morning.
Read the disclaimer: Tom Lydon is a board member of Rydex|SGI.