New home sales came in at 433K annualized in April vs Consensus of 420K. Adding to the good news is that March was revised up by 23K to 407K. Unfortunately, new home sales are still down a little over 4% year-over-year and still haven’t been able to break out above 2013 levels.
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The April data for NYSE Margin Debt definitely raised more than a few red flags for investors. We now have had the first 2-month consecutive drop since September 2011.
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It’s no secret that we’ve been concerned about the lack of new highs in individual stocks since at least the beginning of the year.
Read MoreIt has been a very quiet week on the US economic report front but today we finally have a string of high profile releases. We will take them in order of release times… Jobless Claims snapped back a sharp 28K jobs to 326k during the week of May 17th.
Read MoreOne of the ways in which we can measure whether investors are in general accumulating stocks (bullish) or distributing stocks (bearish) is to track the number of days of skewed market breadth in either direction.
Read MoreWe frequently read about the ”cash mountain” that has piled up on corporate balance sheets since the global financial crisis. In many cases the level of cash is given as evidence that the the non-financial corporate sector is stronger now than ever before.
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We’ve noted several times in the last few weeks the ongoing weakness in lumber prices here, here and here. We watch lumber prices because lumber, being a largely domestically produced and consumed resource, can give a good early indication of changes in domestic economic activity.
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We divide all stocks into baskets in an attempt to understand market internals. All stocks are divided into four groups: 1) early cyclicals, late cyclicals, hyper-cyclicals and counter-cyclicals. The early-cyclical basket is comprised of consumer discretionary stocks, while the late cyclical basket is comprised of industrial and material stocks.
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According to our Factor Scoring Model, net debt as percent of capital had the highest R-squared of any fundamental factor that we track. Long-term debt as a perecent of capital had the second highest correlation to the market as well at 0.61.
Read MoreNew car registrations in the EU slowed to just 4.5%yoy in April, down from a growth rate of more than 13%yoy in December: Interestingly, while new car registrations grew by more than 50%yoy in Portugal and more than 30%yoy in Spain, many of the Nordic countries–as well as Germany– recorded declines in the rate of
Read MoreBonds have had a great last few days as yields have fallen by the largest three-day amount since April of 2013. But, this rally in treasury bonds began at the start of the year and the ten-year now yields about 50bps less than it did then.
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Japan’s GDP grew at a 5.9% annualized rate in Q1, beating expectations for growth of 4.2% and bringing hope that Japan will be able to avoid a tax-increase-induced slowdown in Q2 and beyond (1st chart).
Read MoreDespite (or because of?) the taper and some better economic numbers coming out of the US today, treasury bond yields are down for the 3rd day in a row. If the 30-year closes at 3.33% today (the current yield), the 3-day percent change in yield will be the most negative in about 13 months.
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Last week we analyzed here one reason why the yen has not fallen more, despite all the QE and investor expectations for a much weaker yen.
Read MoreThe KBW Bank index is an index of 24 commercial banks in the US. It is considered a good proxy of the banking sector.
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