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RALLIES ALL OVER THE GLOBE - By Jennifer Coombs

Aug. 19, 2014 1:48 PM ET
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Equity markets, all over the globe, are continuing the rally that started yesterday; further emphasizing that geopolitical concern may have just caused a pullback (not a crash). The NASDAQ hit yet another new 14-year high during today's session and the S&P 500 has recovered all of the 65-point fall from July 31st to August 7th. More companies reported earnings results this morning, including the Dow component, Home Depot (HD), which noted that Q2 comparable store sales jumped 5.8% over last year. Also noteworthy is that Danish shipping giant, Maersk, announced that Q2 revenues substantially beat expectations driven by a 6.6% increase in volumes over last year. Shipping activity among Transocean barges is a very reliable bellwether of global economic activity, and management at Maersk believes that global container demand is up 4%-5% year over year. Domestically, there are additionally signs of a turnaround.

This morning, the Census Bureau's report on housing starts noted that the sector may be making a comeback with the labor market improving and further awareness that the Fed may take actions that increased mortgage rates in the near term. July housing starts jumped to an annualized pace of 1.093 million units, up from 0.945 million units in June. The latest number came in well above expectations for 0.963 million units. This means that July was up a sharp 15.7% month over month, after declining by 4.0% in June. New starts were led by the multifamily sector, which increased by 28.9% in July after a 3.1% decline back in June. However, it was encouraging that the single-family component was also stronger, increasing by 8.3% in July after falling 4.4% in the month before. The permits portion of the release noted that building permits momentum is growing, but primarily for the multifamily sector. Housing permits jumped 8.1% over June to an annualized pace of 1.052 million units. For July, the multifamily component gained 21.5% while the single-family component climbed only 0.9%. Ultimately, the US housing sector is continuing to improve, but there is a definite shift in the housing market: apartment-like housing appears to be the new norm for new buyers. However, one can still argue that any progress is progress nonetheless.

Also worth noting is the ICSC-Goldman weekly same store sales report, which noted that despite a 1.3% decline in sales over last week, there continues to be strength in back-to-school sales. On a year-over-year basis, the tally increased by 3.8% and the chart below still points to a long-term uptrend. Redbook's retail sales reading noted that hot weather and delayed back-to-school apparel purchases caused their numbers to decline. However, Redbook still sees a month-on-month gain of 0.5% which is indicative of strength for the government's ex-auto ex-gas reading. Summer clearance sales are winding down, so now the major focus will be on back-to-school promotions: a prelude to the holiday shopping season.

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