New Home Sales

New home sales declined 1.7% in July from June to a seasonally adjusted annual rate of 627,000 (consensus was 645,000), from a revised 638,000 (upwardly revised from 631,000).  This was the slowest pace since October 2017.The median sales price rose by 1.8% year-over-year to $328,700. Inventory of new homes rose by 6,000 to a 5.9-months’ supply, up from 5.7-months in June.  The market is still plagued by the three L’s; labor, land and lumber. Despite slower sales, home prices rose from June to July. Home builders are down across the board from 0.7% to 2.3%.    

U.S. House Price Index Report - 2Q 2018      

The Federal Housing Finance Agency reported that home prices rose 1.1% in the second quarter. Year over year, house prices rose 6.5%. This compares to average wage growth of 4.36% over the past twelve months.    

Home prices rose in all 50 states year-over-year:

• Top five states

1. Nevada +17%
2. Idaho +13%
3. District of Columbia +11.8%
4. Utah +11.3%
5. Washington +11%

• States with smallest price appreciation

1. N. Dakota +2.1%
2. Louisiana +2.3%
3. W. Virginia 2.3%
4. Connecticut +2.4%
5. Alaska +2.6%

Unemployment Insurance Weekly Claims

Both initial and continuous claim continue to point to a strong labor force.  For the week ended August 18, Initial claims came in at 210,000 (consensus 215,000), a decrease of 2,000 from the prior week. The 4-week moving average was 213,750, a decrease of 1,750.  

Continuous claims for unemployment benefits for the week ended August 11 was 1,727,000, a decrease of 2,000 from the previous week’s revised number (upwardly revised 8,000). A better gauge, the 4-week moving average, was 1,735,500, a decrease of 5,000 from the prior week’s revised average (upwardly revised by 2,000).       

Equity markets are flat to mixed on the session. A strong U.S. dollar is keeping a lid on U.S. industrial names. Tech is being led by the continued rebound in NVDA, and other big tech names, but also smaller names written off not long ago. Advanced Micro (AMD) acts great, as chip names rebound, and Synopsys (SNPS) is surging to a new all-time high on strong earnings (its way passed our original Swing Strategies target, but we are riding the wave - check with your rep or wait for the alert).         

Breadth: Negative, excluding new 52-week highs to lows

• NYSE advances 1,063 to declines 1,825; new 52-week highs 80 to new lows of 28
• Nasdaq advances 1,633 to declines of 1,232; new 52-week highs 144 to new lows 14