Equities continue to ignore any bad news out there, including the Donald Trump administration’s contemplation of unveiling a range of sanctions on China as punishment for the crackdown in Hong Kong, not to mention the heightened tensions between India and China as the former has mobilized troops along its northern border.
Nobody ever seems to notice that the long bond has generated a 25-per-cent total return in 2020. We’ll keep that our little secret There is one area of the U.S. economy that appears to be emerging relatively unscathed and it is housing, especially single-family with backyards and in the suburbs — a pattern we can expect to see post-pandemic. Lumber prices see the opportunity here as they have been bid up 45 per cent from their lows nearly two months ago .
So there was jubilation Tuesday over the U.S. new home sales data for April. The consensus was looking for a 480,000 annualized unit figure, but instead we got 623,000, which represented a 0.7 per cent increase over March .At 623,000, new home sales were still at their second-lowest level since December 2018. The 0.7 per cent bump in April followed a 13.7 per cent plunge in March and a 7.4 per cent slide in February. Barely more than 1/50th of that February-March collapse was recouped in April.
Like new home sales, there was a hubbub about consumer confidence improving in May to 86.6 from 85.7 in April, as that prior month’s headline was revised down to 85.7 from 86.9. The consensus was 87, so there is no getting around the fact that this was actually a smidgen below what the street had been expecting. The 86.6 reading was the second-weakest print since June 2014.