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Home Prices, Consumer Data, Q3 Earnings & Goodbye to Charlie Munger
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Case-Shillerhome prices for September were released today, continuing the uptrend on the 20-city survey for now four straight months. A headline figure of +3.9% was right in-line with analyst forecasts, above a slightly downwardly revised +2.1% for August. Obviously, these are numbers somewhat removed from where we are today, but Case-Shiller data is seen as the most solid housing data reported on a monthly basis.
This is the highest level since the +4.8% we saw in December of last year, back when the Fed funds rate rose from 3.75-4.00% to 4.25-4.50% mid-that month, and mortgage rates were around 200 basis points lower than they are currently. Yet the shortage of homes on the market has led to price increases despite mortgage rates settling above 7%. Incidentally, September marked the second month in the previous three where the Fed did not increase interest rates; July 2023 saw the last hike.
Detroit became the new leader in home price appreciation in this survey, +6.7%, followed by San Diego, +6.5%, and New York, +6.3%. Gone are the days of +30% year over year home price growth, as we saw once the Great Opening was underway. The laggards contain some of the prior home price leaders: Las Vegas, -1.9%, Phoenix, -1.2%, and Portland, OR, -0.7%. Time will tell whether home prices will have continued to increase as mortgage rates reach their current heights, but today’s chart suggests an upward trajectory.
Almost on cue, November Consumer Confidence numbers also came out early this morning, and improved over expectations and from the previous month: 102 beat the 101 consensus estimate, and higher than the downwardly revised 99.1 the previous month. This is the first uptick since July’s 114, and thankfully not headed toward cycle lows we saw in July of last year, 95.3. For context, post-Covid highs were 128.9 in late June 2021, but consumer confidence levels were even higher directly before the pandemic.
Zacks Rank #2 (Buy)-rated cybersecurity staple CrowdStrike (CRWD - Free Report) easily outperformed estimates after today’s closing bell, posting earnings of 82 cents per share — above the expected 74 cents and more than double the 40 cents per share reported in the year-ago quarter — on revenues of $786 million, topping the $777.2 million in the Zacks consensus. Next quarter revenue guidance cranked higher to a range of $836-840 million; analysts had previously been expecting $836 million. Shares are down modestly on this news, but still up more than +100% year to date.
Hewlett-Packard Enterprises (HPE - Free Report) outpaced estimates on its fiscal Q4 earnings this afternoon, beating by 2 cents to 52 cents per share on revenues which came directly in-line with the Zacks consensus, $7.35 billion. Gross Margins reached +34.8%, below forecasts, while its A.I. business outperformed expectations, bringing in $1.2 billion for the quarter.
Cloud data storage major NetApp (NTAP - Free Report) shares are up more than +10% in late trading on its Q3 earnings report after the close, with earnings of $1.58 per share surpassing the $1.40 expected on quarterly sales of $1.56 billion, beating the $1.53 billion forecast. Guidance for Q4 was also raised on both the top and bottom lines, and the company now has a string of 15 straight quarters of earnings beats.
And finally, we say goodbye to Berkshire Hathaway (BRK.B - Free Report) Vice Chair Charlie Munger, Warren Buffett’s self-described right-hand man. Munger helped bring Buffett toward a new way of thinking about investing, namely that “buying a great company for a fair price is better than buying a fair company at a great price.” The outspoken Munger passed away in a California hospital today, five weeks prior to his 100th birthday. Questions or comments about this article and/or author? Click here>>
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Home Prices, Consumer Data, Q3 Earnings & Goodbye to Charlie Munger
Case-Shiller home prices for September were released today, continuing the uptrend on the 20-city survey for now four straight months. A headline figure of +3.9% was right in-line with analyst forecasts, above a slightly downwardly revised +2.1% for August. Obviously, these are numbers somewhat removed from where we are today, but Case-Shiller data is seen as the most solid housing data reported on a monthly basis.
This is the highest level since the +4.8% we saw in December of last year, back when the Fed funds rate rose from 3.75-4.00% to 4.25-4.50% mid-that month, and mortgage rates were around 200 basis points lower than they are currently. Yet the shortage of homes on the market has led to price increases despite mortgage rates settling above 7%. Incidentally, September marked the second month in the previous three where the Fed did not increase interest rates; July 2023 saw the last hike.
Detroit became the new leader in home price appreciation in this survey, +6.7%, followed by San Diego, +6.5%, and New York, +6.3%. Gone are the days of +30% year over year home price growth, as we saw once the Great Opening was underway. The laggards contain some of the prior home price leaders: Las Vegas, -1.9%, Phoenix, -1.2%, and Portland, OR, -0.7%. Time will tell whether home prices will have continued to increase as mortgage rates reach their current heights, but today’s chart suggests an upward trajectory.
Almost on cue, November Consumer Confidence numbers also came out early this morning, and improved over expectations and from the previous month: 102 beat the 101 consensus estimate, and higher than the downwardly revised 99.1 the previous month. This is the first uptick since July’s 114, and thankfully not headed toward cycle lows we saw in July of last year, 95.3. For context, post-Covid highs were 128.9 in late June 2021, but consumer confidence levels were even higher directly before the pandemic.
Zacks Rank #2 (Buy)-rated cybersecurity staple CrowdStrike (CRWD - Free Report) easily outperformed estimates after today’s closing bell, posting earnings of 82 cents per share — above the expected 74 cents and more than double the 40 cents per share reported in the year-ago quarter — on revenues of $786 million, topping the $777.2 million in the Zacks consensus. Next quarter revenue guidance cranked higher to a range of $836-840 million; analysts had previously been expecting $836 million. Shares are down modestly on this news, but still up more than +100% year to date.
Hewlett-Packard Enterprises (HPE - Free Report) outpaced estimates on its fiscal Q4 earnings this afternoon, beating by 2 cents to 52 cents per share on revenues which came directly in-line with the Zacks consensus, $7.35 billion. Gross Margins reached +34.8%, below forecasts, while its A.I. business outperformed expectations, bringing in $1.2 billion for the quarter.
Cloud data storage major NetApp (NTAP - Free Report) shares are up more than +10% in late trading on its Q3 earnings report after the close, with earnings of $1.58 per share surpassing the $1.40 expected on quarterly sales of $1.56 billion, beating the $1.53 billion forecast. Guidance for Q4 was also raised on both the top and bottom lines, and the company now has a string of 15 straight quarters of earnings beats.
And finally, we say goodbye to Berkshire Hathaway (BRK.B - Free Report) Vice Chair Charlie Munger, Warren Buffett’s self-described right-hand man. Munger helped bring Buffett toward a new way of thinking about investing, namely that “buying a great company for a fair price is better than buying a fair company at a great price.” The outspoken Munger passed away in a California hospital today, five weeks prior to his 100th birthday.
Questions or comments about this article and/or author? Click here>>