Homebuilders are feeling confident (emphasis added):
Builder confidence in the market for newly-built single-family homes edged one point lower to 70 in November, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. The past two months mark the highest sentiment levels in 2019.
“Single-family builders are currently reporting ongoing positive conditions, spurred in part by low mortgage rates and continued job growth,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, Conn. “In a further sign of solid demand, this is the fourth consecutive month where at least half of all builders surveyed have reported positive buyer traffic conditions.”
The fundamental backdrop is positive: unemployment is low, wages are rising, the stock market is near highs (which increases confidence), and rates are low. As a result, new home sales are just shy of 12-month highs as are existing home sales.
China is cutting rates modestly (emphasis added):
China's central bank has lowered its new benchmark lending rates in a bid to guide borrowing costs down as the economy expands at its slowest pace in decades.
The People's Bank of China set the one-year Loan Prime Rate--the new reference rate replacing the previous benchmark interest rates--at 4.25% on Tuesday, down from 4.31% before. The LPR is also below the one-year benchmark lending rate that now stands at 4.35%.
While most countries would be envious of China's macroeconomic statistics, most have been trending lower, including GDP growth, retail sales, and industrial production. On the plus side, the manufacturing PMI recently turned positive and the service sector is still expanding. However, this drop means the central bank is concerned enough about downside risks to lower rates.
Is the latest yield curve inversion "normal" or "abnormal?" Work by Kim Kowalewski posted over
