Pre-market futures are up again this morning, continuing the rally that gained steam following last week’s Fed meeting. In reality, we’re still coming off late-October lows in all four major indices, where even the lagging small-cap Russell 2000 managed to catch up to the pack as of the past week. Ahead of this morning’s economic print, the Dow was up +90 points, the S&P 500 was +10 and the Nasdaq +27 points.
Housing Starts for November posted a big upside surprise this morning: 1.560 million seasonally adjusted, annualized units are not only 200K higher than consensus expectations, but also the best tally since May’s 1.583 million and the second-highest print of the year. We’ve clearly reversed the severe lag back in August of 1.305 million — when mortgage rates began getting prohibitively expensive — but still a ways from the 1.8 million per month we were putting up back during the Great Recession.
Building Permits — a proxy for future starts — came in-line, or slightly down, from expectations to 1.46 million seasonally adjusted, annualized units, and below the upwardly revised 1.498 million posted for the previous month. Here we see cycle highs back in August, 1.541 million, and lows in January of this year, 1.354 million.
While we are discussing November numbers and not more recent data, we can still see some of the current narrative emerging here: easing interest rates in 2024 portend well for the housing market as mortgage rates ease, as well. This has only accelerated in the past week, as the Fed’s own estimate is for three quarter-point rate cuts next year. And with pent-up demand already in the housing market as higher rates brought mortgages to 23-year highs kept potential customers on the sidelines, we expect this industry will see some tailwinds into the next year.
Of course, all this is being bid up in the stock market right now; those waiting to get involved in the market once interest rates actually do come down have already missed the boat. That said, the Fed is also expected to remain data-dependent, and prices roaring ahead will no doubt cause the monetary policy body to re-think when interest rates actually need to come down. And the longer they wait, the more the risk of erosion to current market levels becomes a possibility.
But now is not the time for this kind of talk. We’re being merry and full of holiday cheer, etc. We know there’s hard work ahead in 2024 — a presidential election year, as well — and we can find satisfaction in having taken part of this long-awaited rally. Currently, the Dow is now up +63 points, the S&P +7 and the Nasdaq +18.
Image: Bigstock
Housing Starts Come in Higher Than Expected
Pre-market futures are up again this morning, continuing the rally that gained steam following last week’s Fed meeting. In reality, we’re still coming off late-October lows in all four major indices, where even the lagging small-cap Russell 2000 managed to catch up to the pack as of the past week. Ahead of this morning’s economic print, the Dow was up +90 points, the S&P 500 was +10 and the Nasdaq +27 points.
Housing Starts for November posted a big upside surprise this morning: 1.560 million seasonally adjusted, annualized units are not only 200K higher than consensus expectations, but also the best tally since May’s 1.583 million and the second-highest print of the year. We’ve clearly reversed the severe lag back in August of 1.305 million — when mortgage rates began getting prohibitively expensive — but still a ways from the 1.8 million per month we were putting up back during the Great Recession.
Building Permits — a proxy for future starts — came in-line, or slightly down, from expectations to 1.46 million seasonally adjusted, annualized units, and below the upwardly revised 1.498 million posted for the previous month. Here we see cycle highs back in August, 1.541 million, and lows in January of this year, 1.354 million.
While we are discussing November numbers and not more recent data, we can still see some of the current narrative emerging here: easing interest rates in 2024 portend well for the housing market as mortgage rates ease, as well. This has only accelerated in the past week, as the Fed’s own estimate is for three quarter-point rate cuts next year. And with pent-up demand already in the housing market as higher rates brought mortgages to 23-year highs kept potential customers on the sidelines, we expect this industry will see some tailwinds into the next year.
Of course, all this is being bid up in the stock market right now; those waiting to get involved in the market once interest rates actually do come down have already missed the boat. That said, the Fed is also expected to remain data-dependent, and prices roaring ahead will no doubt cause the monetary policy body to re-think when interest rates actually need to come down. And the longer they wait, the more the risk of erosion to current market levels becomes a possibility.
But now is not the time for this kind of talk. We’re being merry and full of holiday cheer, etc. We know there’s hard work ahead in 2024 — a presidential election year, as well — and we can find satisfaction in having taken part of this long-awaited rally. Currently, the Dow is now up +63 points, the S&P +7 and the Nasdaq +18.