US STOCKS: Late Equities Roundup: Global Trade Uncertainty Sapped Early Support

Feb-26 19:49

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* Stocks have retreated steadily from Wednesday's midday highs, apparently as President Trump's ca...

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US DATA: New Home Sales Pick Up, But Outlook Remains Subdued

Jan-27 19:40

December's pickup in new home sales was larger than expected, reaching 698k (675k expected) on an seasonally-adjusted annualized rate basis, up from 674k in November (revised up from 664k). 

  • That marked a 3-month high (and a 6.7% Y/Y gain), with inventories down to 8.5 months worth of sales (from 8.7 prior and a recent peak of 9.4). Median prices for single-family homes rose 2.1% Y/y ($427k, not seasonaly adjusted).
  • As with the previous week's stronger-than-expected existing home sales report, this suggested a slight tightening in the housing market at end-year, albeit at subdued levels (especially for existing).
  • Some of the improvement may have resulted from the pullback in mortgage rates in the summer, which started reversing  in September/October.
  • New home sales have been relatively less afftected than those of existing homes, in part because of homebuilder-provided incentives to offset high mortgage costs for buyers.
  • With inventories remaining relatively high by historic standards and mortgage rates rebounding, it's unclear how much further homebuilding activity has to pick up in coming quarters: the NAHB's sentiment index, a leading indicator of building permits acitivity, has stabilized since plummeting  in mid-2023 but remains below historic averages.
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FED: Jan 2025 FOMC Analyst Views: QT Seen Ending Mid-Year (2/2)

Jan-27 19:21

All analysts expect the FOMC to hold rates steady at the January meeting.

  • Statement: Changes are seen being limited largely to the first paragraph describing current economic conditions. Most focus is on the labor market language, which – for those analysts who expect statement tweaks – could shift slightly to reflect some stabilization in conditions in recent months, vs previous easing.
  • Forward guidance is expected to be unchanged.
  • QT: The Fed is seen ending quantitative tightening (more specifically, for Treasuries, with MBS continuing to run off), at some point between March and September 2025 – consensus is for a mid-year (ie June) end.

FED: Jan 2024 FOMC Analyst Views: Wide Range Of Cutting Calls (1/2)

Jan-27 19:19

Analysts enter the first FOMC meeting of 2025 expecting anywhere from zero rate cuts to 125bp worth of reductions by year-end, with March the first plausibly “live” meeting.

  • The central expectation is for 50bp of reductions in 2025, with analysts either looking for front-loaded (March, June) or back-loaded (September, December) reductions.
  • Some see more easing in 2026 than in 2025 (Barclays, Deutsche Nomura).
  • None expect the FOMC to hike.
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