Sunday, April 19, 2015

Sunday Night Futures

by Bill McBride on 4/19/2015 08:24:00 PM

From the NY Times: Greece Flashes Warning Signals About Its Debt

By the standards of his frenzied schedule here last week, the meeting on Friday between Yanis Varoufakis, the Greek finance minister, and Lee C. Buchheit, the dean of international debt lawyers, was a quiet one.
But the get-together with Mr. Buchheit carried critical meaning, according to experts here. After all, it was Mr. Buchheit who helped broker Greece’s most recent debt refinancing, in 2012.
Unless the creditors agree soon to release the next allotment of bailout money, Greece could have trouble making a $763 million payment to the I.M.F. on May 12. It almost certainly would not be able to meet the €11 billion in payments to the European Central Bank in June and July.
• 8:30 AM ET: Chicago Fed National Activity Index for March. This is a composite index of other data.

Schedule for Week of April 19, 2015

Existing Home Sales: Lawler vs. the Consensus

From CNBC: Pre-Market Data and Bloomberg futures: currently S&P futures are up slightly and DOW futures are up 25 (fair value).

Oil prices were up sharply over the last week with WTI futures at $56.09 per barrel and Brent at $63.45 per barrel.  A year ago, WTI was at $104, and Brent was at $107 - so prices are down over 40% year-over-year.

Below is a graph from for nationwide gasoline prices. Nationally prices are up to $2.46 per gallon (down about $1.20 per gallon from a year ago).

If you click on "show crude oil prices", the graph displays oil prices for WTI, not Brent; gasoline prices in most of the U.S. are impacted more by Brent prices.

Orange County Historical Gas Price Charts Provided by

Existing Home Sales: Lawler vs. the Consensus

by Bill McBride on 4/19/2015 09:43:00 AM

The NAR will report March Existing Home Sales on Wednesday, April 22nd. The consensus, according to Bloomberg, is that the NAR will report sales of 5.04 million. Housing economist Tom Lawler estimates the NAR will report sales of 5.18 million on a seasonally adjusted annual rate (SAAR) basis, up from 4.88 million SAAR in February.

Housing economist Tom Lawler has been sending me his predictions of what the NAR will report for 5 years.  The table below shows the consensus for each month, Lawler's predictions, and the NAR's initial reported level of sales. 

Lawler hasn't always been closer than the consensus, but usually when there has been a fairly large spread between Lawler's estimate and the "consensus", Lawler has been closer.

Over the last five years, the consensus average miss was 150 thousand with a standard deviation of 160 thousand.  Lawler's average miss was 70 thousand with a standard deviation of 45 thousand.

Note: Many analysts now change their "forecast" after Lawler's estimate is posted, so the consensus has improved a little better recently!

Existing Home Sales, Forecasts and NAR Report
millions, seasonally adjusted annual rate basis (SAAR)
MonthConsensusLawlerNAR reported1
1NAR initially reported before revisions.

Saturday, April 18, 2015

Schedule for Week of April 19, 2015

by Bill McBride on 4/18/2015 10:56:00 AM

The key economic reports this week are March new home sales on Thursday and existing home sales on Wednesday.

----- Monday, April 20th -----

8:30 AM ET: Chicago Fed National Activity Index for March. This is a composite index of other data.

----- Tuesday, April 21st -----

10:00 AM: Regional and State Employment and Unemployment (Monthly), March 2015

----- Wednesday, April 22nd -----

7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

9:00 AM: FHFA House Price Index for February 2015. This was originally a GSE only repeat sales, however there is also an expanded index.

Existing Home Sales10:00 AM: Existing Home Sales for March from the National Association of Realtors (NAR).

The consensus is for sales of 5.03 million on seasonally adjusted annual rate (SAAR) basis. Sales in February were at a 4.88 million SAAR. Economist Tom Lawler estimates the NAR will report sales of 5.18 million SAAR.

A key will be the reported year-over-year increase in inventory of homes for sale.

During the day: The AIA's Architecture Billings Index for March (a leading indicator for commercial real estate).

----- Thursday, April 23rd -----

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 290 thousand from 294 thousand.

New Home Sales10:00 AM: New Home Sales for March from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the February sales rate.

The consensus is for a decrease in sales to 510 thousand Seasonally Adjusted Annual Rate (SAAR) in March from 539 thousand in February.

----- Friday, April 24th -----

8:30 AM: Durable Goods Orders for February from the Census Bureau. The consensus is for a 0.6% increase in durable goods orders.

Friday, April 17, 2015

Philly Fed: State Coincident Indexes increased in 46 states in February

by Bill McBride on 4/17/2015 07:29:00 PM

From the Philly Fed:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for February 2015. In the past month, the indexes increased in 46 states, decreased in one, and remained stable in three, for a one-month diffusion index of 90. Over the past three months, the indexes increased in 49 states and decreased in one (West Virginia), for a three-month diffusion index of 96.
Note: These are coincident indexes constructed from state employment data. An explanation from the Philly Fed:
The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.
Philly Fed Number of States with Increasing ActivityClick on graph for larger image.

This is a graph is of the number of states with one month increasing activity according to the Philly Fed. This graph includes states with minor increases (the Philly Fed lists as unchanged).

In February, 49 states had increasing activity (including minor increases). This measure has been moving up and down, and is in the normal range for a recovery.

Philly Fed State Conincident Map Here is a map of the three month change in the Philly Fed state coincident indicators. This map was all red during the worst of the recession, and is almost all green again.

It seems likely that several oil producing states will turn red sometime in 2015 - possibly Texas, North Dakota, Alaska or Oklahoma.

Key Measures Show Low Inflation in March

by Bill McBride on 4/17/2015 04:17:00 PM

The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (2.6% annualized rate) in March. The 16% trimmed-mean Consumer Price Index also rose 0.2% (2.2% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report.

Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.2% (2.9% annualized rate) in March. The CPI less food and energy also rose 0.2% (2.8% annualized rate) on a seasonally adjusted basis.
Note: The Cleveland Fed has the median CPI details for March here.

Inflation Measures Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. On a year-over-year basis, the median CPI rose 2.2%, the trimmed-mean CPI rose 1.8%, and the CPI less food and energy rose 1.8%. Core PCE is for February and increased 1.4% year-over-year.

On a monthly basis, median CPI was at 2.6% annualized, trimmed-mean CPI was at 2.2% annualized, and core CPI was at 2.8% annualized.

On a year-over-year basis these measures suggest inflation remains below the Fed's target of 2% (median CPI is slightly above 2%).

The key question for the Fed is if these key measures will move back towards 2%.

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