Charles Payne's Market Commentary

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Afternoon Note

Housing Recession

By Charles Payne, CEO & Principal Analyst
8/15/2022 1:03 PM

We begin the week with two massive misses on key economic data.

Check out this headline from the New York Federal Reserve on manufacturing in July.

The headline general business conditions index plummeted forty-two points to -31.3.

Check out this headline from the National Association of Homebuilders.

Builder Confidence Underwater After Falling for Eighth Consecutive Month

This morning the NAHB Survey was so awful, their chief economist says we have entered a housing recession. Traffic of potential buyers plunged to the lowest level since April 2014, save for two months at the start of the pandemic.

United States Nahb Housing Market Index

TableDescription automatically generated

All eyes are fixed on retailers reporting this week including two behemoths. Lately, it’s been smarter to be out of these stocks than long.

Retail Heavyweights	WMT	HD
May 2022	-17.3%	-3.4%
Feb 2022	+11%	-8.9%
Nov 2021	-1.4%	+10.2%
Aug 2021	-0.2%	-2.2%
May 2021	+2.1%	-1.6%
Feb 2021	-9.1%	-4.9%
Nov 2020	-1.6%	-2.8%

HD is up 230% since 2015 but was up 340% at one time.

For the broad market, the bias remains to the upside and the big boys are getting squeezed – take a picture, this doesn’t happen all the time. However, when it does, it can have a life of its own even with the inflation/recession debate raging.

Comments

This market concerns me. It seems to ignore bad economic data coming in, and historically, the other shoe drops within short order (no pun intended). The interview with Dan Niles with Maria Bartiromo said it all, really. This is a bear rally with a sizable correction on it's way.

Craig Michaels on 8/15/2022 1:40:54 PM

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