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Summer Home Prices Tumbled; Q3 Reports from GM, GE
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Tuesday, October 25, 2022
Ahead of Tuesday’s opening bell, where we’re seeing some giveback this morning based on the Dow at a 6-week high and the S&P 500 5 weeks. But we also see more big Q3 earnings results and a new home price survey out at this hour. These don’t appear to be having an effect on the pre-market buying and selling, but for sure the Fed is paying close attention.
The Case-Shiller Home Price Index for August — yes, this report goes only that close to the present — shows the biggest monthly decline in annual home prices on record (going back to 1987): -15.6% month over month, though +13% year over year, which is lower than the +14.4% expected. This is the strongest evidence yet that the Fed’s aggressive interest rate hikes are having a profound effect on housing, which takes up a sizable portion of GDP.
The 10-city survey grew +12.1% overall, down from July’s +14.9%. The wider-ranging 20-city gained +13.1% from a year ago, down from +16% the previous month. The biggest gainers were a couple of the usual suspects — Miami +28.6% and Tampa +28% — with Charlotte gaining the third highest of any American cities for the month: +21.3%. The biggest losers were recently among the biggest gainers earlier this year: San Francisco -4.3%, Seattle -3.9% and San Diego -2.8%.
Where we used to routinely see the biggest softness in crowded, cold-weather cities in the Northeast and the Midwest, these laggards in the latest Case-Shiller report are decidedly West Coast. High taxes, massive homelessness (and subsequent worsening crime) and already-high home prices on the “Left Coast” would appear to be a bigger negative than huge hurricanes ripping through Florida these days.
General Motors (GM - Free Report) beat estimates on both top and bottom lines, reporting earnings of $2.25 per share easily surpassing the $1.89 in the Zacks consensus on $41.89 billion in revenues, modestly higher than the $41.44 billion expected. This reverses Q2’s earnings miss; the automotive giant is trading up +2% in the early session. For more on GM’s earnings, click here.
General Electric (GE - Free Report) also posted Q3 earnings this morning, with mixed results: earnings of 35 cents per share missed the 47 cents anticipated and the 57 cents per share reported a year ago. This is the first earnings miss for GE since the pandemic. Revenues eked out a beat on the topline by +0.26% to $19.08 billion in the quarter. GE shares are also up +2% ahead of the opening bell. For more on GE earnings, click here.
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Summer Home Prices Tumbled; Q3 Reports from GM, GE
Tuesday, October 25, 2022
Ahead of Tuesday’s opening bell, where we’re seeing some giveback this morning based on the Dow at a 6-week high and the S&P 500 5 weeks. But we also see more big Q3 earnings results and a new home price survey out at this hour. These don’t appear to be having an effect on the pre-market buying and selling, but for sure the Fed is paying close attention.
The Case-Shiller Home Price Index for August — yes, this report goes only that close to the present — shows the biggest monthly decline in annual home prices on record (going back to 1987): -15.6% month over month, though +13% year over year, which is lower than the +14.4% expected. This is the strongest evidence yet that the Fed’s aggressive interest rate hikes are having a profound effect on housing, which takes up a sizable portion of GDP.
The 10-city survey grew +12.1% overall, down from July’s +14.9%. The wider-ranging 20-city gained +13.1% from a year ago, down from +16% the previous month. The biggest gainers were a couple of the usual suspects — Miami +28.6% and Tampa +28% — with Charlotte gaining the third highest of any American cities for the month: +21.3%. The biggest losers were recently among the biggest gainers earlier this year: San Francisco -4.3%, Seattle -3.9% and San Diego -2.8%.
Where we used to routinely see the biggest softness in crowded, cold-weather cities in the Northeast and the Midwest, these laggards in the latest Case-Shiller report are decidedly West Coast. High taxes, massive homelessness (and subsequent worsening crime) and already-high home prices on the “Left Coast” would appear to be a bigger negative than huge hurricanes ripping through Florida these days.
General Motors (GM - Free Report) beat estimates on both top and bottom lines, reporting earnings of $2.25 per share easily surpassing the $1.89 in the Zacks consensus on $41.89 billion in revenues, modestly higher than the $41.44 billion expected. This reverses Q2’s earnings miss; the automotive giant is trading up +2% in the early session. For more on GM’s earnings, click here.
General Electric (GE - Free Report) also posted Q3 earnings this morning, with mixed results: earnings of 35 cents per share missed the 47 cents anticipated and the 57 cents per share reported a year ago. This is the first earnings miss for GE since the pandemic. Revenues eked out a beat on the topline by +0.26% to $19.08 billion in the quarter. GE shares are also up +2% ahead of the opening bell. For more on GE earnings, click here.
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