Economy – Additions & Updates
Additions – inflation expectations, World trade, China electricity consumption & manufacturing
Updates – initial jobless claims, housing, sentiment, manufacturing
Asset Allocation – Additions & Updates
Additions – US only allocations, currency trends
Updates – none
Economic Summary:
Initial Jobless Claims – falling
Inflation Expectations – on target
Housing – existing home sales: expanding, new home sales: falling
Sentiment – falling
Manufacturing – falling / recessionary
World Trade – falling
China Electricity Consumption & Manufacturing – falling
Initial Jobless Claims
Initial jobless claims dropped 26,000 to 255k – its lowest since Nov 1973, increasing the odds of a rate hike.
Inflation Expectations
The five-year, five-year forward breakeven inflation rate, the preferred inflation rate measure when Bernanke was head of the Fed, is currently at 2.16, the high end of the 2015 range between 1.95 – 2.20.
This is still on the low end of the range going back to 2003 however above the Fed target of 2.0 and increases the possibility of a rate hike sooner rather than later.
Housing
Existing Home Sales soared to 5.49 million, the highest since early 2007.
The median existing-home price for all housing types in June was $236,400, which is 6.5 percent above June 2014 and surpasses the peak median sales price set in July 2006 ($230,400). June’s price increase also marks the 40th consecutive month of year-over-year gains.
Price gains were dominated by the $500 k plus range with low-cost home (under $100k ) seeing prices drop 2.6%
As supply continues to drop…
Despite exuberant existing home sales, new home sales crossed back below the 500k to 482k . . . the lowest since Nov 2014.
