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  • Friday, September 19, 2014

  • 10:03 AM
    • September Atlanta Fed BIE: +2.1% vs. +2% in August.
    • Respondents indicated their unit sales gap was approximately 3.6% below normal compared to 3.4% below normal in August.
    | Comment!
  • 10:00 AM
    • Aug Leading Indicators: Leading Index +0.2% to 103.8 vs. +0.4% expected, +1.1% in July (revised).
    • Coincident Index +0.2% vs. +0.2% prior.
    • Lagging Index +0.3% vs. +0.2% prior.
    | Comment!
  • 8:32 AM
    • "I cannot support the Committee’s planned approach to moving the Fed’s balance sheet toward its normal state," says Richmond Fed chief Jeffrey Lacker. The FOMC currently doesn't plan to sell its vast trove of MBS, he notes, and "this approach unnecessarily prolongs our interference in the allocation of credit."
    • The Fed's MBS holdings unfairly tilts the playing field to those taking out mortgages, but against consumers borrowing for other purposes, says Lacker. "The desire to avoid such effects is a long-standing principle in the conduct of U.S. monetary policy over the last half-century."
  • Thursday, September 18, 2014

  • 3:05 PM
    • That's hard to believe given single-family housing starts are on a pace of 622K this year, after 618K a year ago - a far cry from the pre-bubble average of 1.1M in the 1990s. Trouble is, says Kelko, the historical norm doesn't say what the level of construction should be now. Instead, look at the rate of household formation.
    • If housing starts run ahead of the rate of household formation, homes sit empty and vacancies rise, and that's just what the latest data from the Census Bureau shows. As opposed to multi-unit rental market where vacancies are falling. Even with an increase in single-family rentals, the overall single-family vacancy rate ticked up to 10.7% in 2013 from 10.6% a year earlier, and vs. 7.4% in the pre-bubble days of 2000.
    • For single-family vacancy rates to get back to normal, even household formation needs to increase or housing starts need to slow. In the meantime, it will be multi-family activity needing to lead the construction recovery.
    • Separately, the former head of Goldman's housing research team says home prices are 12% overvalued today and have already started to slide. "I am lamentably confident that home prices will fall by 15% within three years."
    • Homebuilder ETFs: ITB, XHB
  • 10:12 AM
    • Mortgage rates moved higher in the past week, according to the latest Freddie Mac survey which shows the average rate for a 30-year fixed-rate mortgage climbing to 4.23%, hitting the highest rate since early May.
    • The average rate for the 15-year fixed-rate mortgage rose to 3.37%; last week, the respective 30-year and 15-year rates averaged 4.12% and 3.26%.
    • A year ago, the 30-year rate was at 4.50% while the 15-year rate averaged 3.54%.
    | Comment!
  • 10:00 AM
    | Comment!
  • 8:52 AM
    • August housing starts of 956K fell 14.4% from July's 1.1M, and were 8% higher than a year ago. Single-family starts of 643K fell 2.4% from July, making volatile multi-family starts the key to August's drop.
    • Building permits of 998K declined 5.6% from July and were up 5.3% from a year ago.
    • Full report
    • The iShares DJ U.S. Home Construction ETF (NYSEARCA:ITB) is lower by 0.35% premarket. The more homebuilder supply-focused XHB shows no premarket action.
    | 1 Comment
  • 8:31 AM
    • August Housing Starts: -14.4% to 0.956M vs. 1.04M expected and 1.11M prior (revised).
    • Permits -5.6% to 0.99M vs. 1.05M prior (revised).
  • 8:30 AM
    • Initial Jobless Claims: -36K to 280K vs. 305K consensus, 316K prior revised. (prior 315K).
    • Continuing Claims -63K to 2.43M
  • Wednesday, September 17, 2014

  • 2:16 PM
    • There's little news from the FOMC policy statement (other than two dissents instead of one), but there's a bit more action in the economic projections and the "dots."
    • The projection for 2015 GDP growth is cut somewhat, but so is the forecast unemployment rate, now at a range of 5.4-5.6% from 5.4-5.7%. The high end of the core PCE inflation forecast is cut, now 1.6-1.9% from 1.6-2.0%.
    • 11 out of 17 FOMC members now see the Fed Funds rate at above 1% by the end of 2015. Four of the group see Fed Funds at about 4% by the end of 2016.
    • The bond market is selling off on what could be argued to be a more hawkish lean to the policy statement and projections. The 10-year Treasury yield - at about 2.56% ahead of the release - is up to 2.60% at the moment. TLT +0.35%
    • More sensitive to short rate, the 3-year yield jumps about 7 basis points to 1.1%.
    • Janet Yellen's press conference begins at 2:30 ET.
  • 2:05 PM
    • There's little change to the language in the FOMC policy statement, with the "considerable period" language remaining. The taper continues, and the FOMC expects to end the asset purchase program at its next policy meeting.
    • There were two dissents to today's action, with Richard Fisher and Charles Plosser arguing the strength in the economy will warrant an earlier rate hike than is currently anticipated.
  • 10:50 AM
    • “Since early summer, builders in many markets across the nation have been reporting that buyer interest and traffic have picked up," says NAHB Chairman Kevin Kelly. On the other hand, says NAHB Chief Economist David Crowe, "We are still not seeing much activity from first-time homebuyers."
    • This month's increase in the headline Housing Market Index to 59 was the fourth straight gain, and brought the level to its highest since November 2005.
    • ITB +3%, XHB +1.8%
    • Previously: Homebuilders party after Lennar results
    | Comment!
  • 10:18 AM
  • 10:04 AM
    • Lennar's sizable earnings beat included a 23% gain in new orders - a strong result given the slowdown seen from some other builders.
    • Previously: Lennar up 4.3% after reporting big quarter
    • ETFs: ITB +2.6%, XHB +1.8%
    • Individual players: Ryland (RYL +4.8%) Pulte (PHM +3.8%), Toll Bros. (TOL +3.2%), D.R. Horton (DHI +4%), Hovnanian (HOV +5.8%), KB Home (KBH +4.4%), Comstock (CHCI +4.2%), Standard Pacific (SPF +3.8%).
  • 8:47 AM
  • 8:30 AM
    | 1 Comment
  • 8:30 AM
    | Comment!
  • 8:20 AM
    • Isn't this one of the ways we got into the housing mess? Citigroup (NYSE:C) signs on with Bank of America (NYSE:BAC) to fund 15-year mortgages at below-market rates for borrowers with low incomes, spotty credit histories, or both.
    • The loans are being originated by the Neighborhood Assistance Corporation of America (NACA), a group - that has the ear of HUD - known for pushing banks to show they're fulfilling the terms required of them by the Community Reinvestment Act of 1977 (no redlining).
    • The moves also follow the banks' massive mortgage settlements, part of which were agreements to provide assistance to troubled mortgagees, though both say this new program is not related.
    • For its part, NACA says the foreclosure-loss rate on more than 18K purchase loans it has originated since 2006 is about 0%, with one of the reasons being NACA making up to three months of mortgage payments when borrowers run into trouble.
  • 7:02 AM
    • MBA Mortgage Applications:
    • Composite Index: +7.9% vs. -7.2% last week.
    • Purchase Index: +5.0% vs. -3% last week.
    • Refinance Index: 10% vs. -11% last week.
    • Fixed 30-year mortgage rate rises to 4.36% from 4.27.
    | Comment!
  • 4:04 AM
    • According to new figures from the Census Bureau, inflation-adjusted income for the median U.S. household rose by just 0.3% in 2013, no higher than a quarter of a century ago.
    • This translates into the median household edging up just $180 last year to $51,939, highlighting another year of stagnant incomes.
    • The poverty rate fell from 15% to 14.5%, the first decrease since 2006, but it is still two percentage points higher than it was before the recession.
    | 1 Comment
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