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Housing Gets Pricey, Trumpland Gets Dicey

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Wednesday, March 22, 2017

New mortgage application numbers are unchanged at a rate of 4.46. This is down 2.7%, and the fast-rising cost of housing in general has shifted, demand having fallen year over year. Applications are down 3% as demand for housing in the U.S. is strengthening, which is good for those actively trading home real estate, but bad for those looking to get in the market right now.

At 10am ET, we’ll see a report come out from the National Association of Realtors. Expectations are for a read of -2.5%, adjusting somewhat for the 3.3% jump last time around. Basically, housing demand is shrinking as costs spike — clearly, we’ve seen investment activity in the buying up of homes lately, which is allowing folks interested in selling their houses to seek higher prices. But putting that money to work in another place to live has become problematically pricey, as well.

Earnings Island Revisited

After the bell yesterday, FedEx (FDX - Free Report) missed analyst estimates, yet the stock is up 2.6% in today’s pre-market. Turns out the increased prices of oil & gas — supplying FedEx’s delivery planes with energy — has hurt margins for the global logistics major in the most recently reported quarter. Strength in deliveries continue; this is not (yet) a comment on Amazon (AMZN - Free Report) having stolen FedEx’s business.

Meanwhile, Nike (NKE - Free Report) has beaten earnings estimates on weaker-than-expected revenues. Weakness in domestic specialty retail (versus Amazon specifically) was to blame, although Nike does have more competition than it has experienced lately, specifically from Adidas (ADDYY - Free Report) and Under Armour (UA - Free Report) . For a more comprehensive study of Nike’s earnings report, check here.

White House Blues

If we’re looking for reasons for an equities slump, consider for a moment — knowing much of Zacks’ viewership is right-of-center, politically — that there is currently a house of cards that some analysts are not certain will stand: an FBI investigation about Russia’s involvement in the election of Donald Trump, details about Paul Ryan’s new healthcare revision not being met with wholehearted support (yet) and the following possibility of a major tax cut outlook made cloudier by the day.

There is much in the Trump plan that should pose a boon to the market, but equities participants hadn’t priced in anything but perfection, generally… until yesterday (arguably). That there was a pretty big sell-off in yesterday’s regular trading day that hasn’t already corrected in today’s pre-market — and not all of it can be blamed on Nike — might be taken as a sign that not all is rosy in Trumpland today.

Mark Vickery
Senior Editor

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