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Pre-Markets Try to Buck Bearish Trend

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Tuesday, September 27, 2022

Pre-market futures are up this morning, the same morning we see new Durable Goods Orders for the month of August, which were less negative than expected. But futures were up anyway; currently, the Dow is +350 points, the S&P 500 is +50 and the Nasdaq is +190 points. Markets are looking to break a five-day losing streak, and it looks like we’re off to a decent start.

Preliminary Durable Goods Orders last month were down -0.2%, for the second-straight negative month, though better than the -0.5% expected. Even though it’s an improvement over what was anticipated, it’s still the lowest monthly print on Durable Goods since the -0.7% we saw posted back in February of this year.

Stripping out volatile transportation costs, this figure moves across the ledger to +0.2%, matching the +0.2% we saw the previous month. Non-Defense, ex-Aircraft — a read on “regular” business investing in durables — actually shot up to +1.3%: an unexpectedly positive number, and the best we’ve seen since +1.4% in January. Shipments came in at +0.4%, another strong read, though down from the big upward revision in July to +0.7%.

The Case-Shiller Home Price Index for July demonstrated pullback in the housing market, though prices were up +15.8% year over year. This is down markedly from the +18.1% for June. This headline comes from combining the +14.99% in the 10-city survey and +16.1% in the 20-city. No cities lost ground in housing value year over year, and were led by very strong numbers in Tampa (+31.8%), Miami (+31.7%) and Dallas (+24.7%).

In a separate report on housing, the National Association of Realtors is seeing three-times the level of average decline in late-summer housing prices. In August alone, 20% of homes for sale came down in price — the lowest figure in five years. Housing is the first and most clearly affected industry of the Fed’s aggressive rate hikes over the past six months.

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