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Case-Shiller Home Prices Cooling; FedEx After the Close

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Tuesday, June 25th, 2024

We’re experiencing a reverse of the reversal ahead of today’s open. The Dow, which has led market indices since last week’s Juneteenth break, is currently -73 points, while the S&P 500 is +6 points and the Nasdaq +69. This is more the feel we’ve experienced for most of this past quarter, which ends when this workweek does. The Dow is still down -1% from the start of the quarter, while the S&P and Nasdaq are up +4% and +7.5%, quarter to date.

Case-Shiller Home Prices for April have just been released. This survey, while looking back a couple months in arrears, is nevertheless considered the most accurate of monthly housing data reports. A decelerating upward trend is what we see here: +6.3% down 20 basis points (bps) month over month. This amounts to +8.0% on the 10-city and +7.2% on the 20-city survey, down from +8.3% and +7.5%, respectively. San Diego once again led the way, with home prices growing +10.3%, followed by New York City at +9.4% and Chicago +8.7%.

Mortgage rates were rising in April. The average 15-year mortgage was offering +6.6% interest, with +7.6% on the 30-year. This is slightly higher than the +7.5% we see in the housing market currently, though they do remain stubbornly high. And while we know entry-level prospective homeowners (and those holding onto their 3% mortgages) are being priced out of the market, the fact of the matter is that no cities in the Case-Shiller survey posted negative housing growth number (Portland was in last place: +1.7%).

After the opening bell today, Consumer Confidence for June comes out. We’re looking for a slight downtick to 100.0 from 102.0 in May; this metric has been holding around 100 since the onset of the Covid pandemic four years ago. Prior to that, the American consumer was feeling better — routinely over levels of 120 as the economy enjoyed its comeback from the Great Recession at the end of the prior decade. The Consumer Sentiment survey, released two weeks ago, displayed a consumer with weighing concerns regarding inflation and stalling wage gains.

FedEx (FDX - Free Report) reports fiscal Q4 earnings this afternoon. The second-largest U.S.-based delivery and logistics company is expected to post earnings growth of +8.1% on +0.85% higher revenues, year over year. Coming as this does a couple weeks ahead of what we more clearly recognize as earnings season — and because it is a good barometer for consumer activity — FedEx earnings are useful in determining key avenues of the economy, looking ahead. The company carries a Zacks Rank #3 (Hold) into this earnings print, with a Style Score of B.

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