by Calculated Risk on 10/14/2019 09:16:00 PM

Tuesday:
• At 8:30 AM ET, The New York Fed Empire State manufacturing survey for October. The consensus is for a reading of 0.8, down from 2.0.

by Calculated Risk on 10/14/2019 11:44:00 AM

Way back in 2005, I posted a graph of the Real Estate Agent Boom. Here is another update to the graph.

The graph shows the number of real estate licensees in California.

The number of agents peaked at the end of 2007 (housing activity peaked in 2005, and prices in 2006).

The number of salesperson's licenses is off 26% from the peak, and is increasing again (up 11% from low). The number of salesperson's licenses has increased to November 2004 levels.

Brokers' licenses are off 14.2% from the peak and have fallen to December 2005 levels, and may be bottoming..

Click on graph for larger image.

We are seeing a pickup in Real Estate licensees in California, although the number of Brokers is mostly flat.

by Calculated Risk on 10/14/2019 09:24:00 AM

From Reuters: Oil falls due to caution over first phase of U.S.-China trade deal

Oil prices fell more than 2% on Monday as scant details about the first phase of a trade deal between the United States and China undercut optimism over a U.S.-Sino thaw that had helped lift crude markets by 2% at the end of last week.

Click on graph for larger image

The first graph shows WTI and Brent spot oil prices from the EIA. (Prices today added).

According to Bloomberg, WTI is at $53.44 per barrel today, and Brent is at $59.13.

Prices collapsed in 2008 due to the financial crisis, and then increased as the economy recovered.   Oil prices collapsed again in 2014 and 2015, mostly due to oversupply.

The second graph shows the year-over-year change in WTI based on data from the EIA.

Six times since 1987, oil prices have increased 100% or more YoY.  And several times prices have almost fallen in half YoY.

Currently WTI is down 28% year-over-year.

Just a reminder that oil prices are volatile!

by Calculated Risk on 10/13/2019 08:04:00 PM

Weekend:
• Schedule for Week of October 13, 2019

Monday:
• Columbus Day Holiday: Banks will be closed in observance of Columbus Day. The stock market will be open. No economic releases are scheduled.

From CNBC: Pre-Market Data and Bloomberg futures: S&P 500 are up 10 and DOW futures are up 107 (fair value).

Oil prices were up over the last week with WTI futures at $54.79 per barrel and Brent at $60.58 barrel.  A year ago, WTI was at $72, and Brent was at $81 - so oil prices are down about 25% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.63 per gallon. A year ago prices were at $2.89 per gallon, so gasoline prices are down 26 cents year-over-year.

by Calculated Risk on 10/13/2019 10:32:00 AM

The following graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the September 2019 seasonally adjusted annual sales rate (SAAR).

Heavy truck sales really collapsed during the great recession, falling to a low of 180 thousand in May 2009, on a seasonally adjusted annual rate basis (SAAR). Then sales increased more than 2 1/2 times, and hit 479 thousand SAAR in June 2015.

Heavy truck sales declined again - mostly due to the weakness in the oil sector - and bottomed at 366 thousand SAAR in October 2016.


Click on graph for larger image.

Following the low in 2016, heavy truck sales increased to a new all time high in July 2019, but have declined over the last couple months.

Heavy truck sales were at 501 thousand SAAR in September, down from 538 thousand SAAR in August, and down from 526 thousand SAAR in September 2018.

by Calculated Risk on 10/12/2019 08:11:00 AM

The key economic reports this week are September Housing Starts and Retail Sales.

For manufacturing, September Industrial Production, and the October New York and Philly Fed surveys, will be released this week.

----- Monday, Oct 14th -----
Columbus Day Holiday: Banks will be closed in observance of Columbus Day. The stock market will be open. No economic releases are scheduled.

----- Tuesday, Oct 15th -----
8:30 AM ET: The New York Fed Empire State manufacturing survey for October. The consensus is for a reading of 0.8, down from 2.0.

----- Wednesday, Oct 16th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM ET: Retail sales for September will be released.  The consensus is for a 0.3% increase in retail sales.

This graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993. Retail and Food service sales, ex-gasoline, increased by 4.5% on a YoY basis in August.

10:00 AM: The October NAHB homebuilder survey. The consensus is for a reading of  68, unchanged from 68 in September. Any number above 50 indicates that more builders view sales conditions as good than poor.

----- Thursday, Oct 17th -----
8:30 AM: Housing Starts for September.

This graph shows single and total housing starts since 1968.

The consensus is for 1.300 million SAAR, down from 1.364 million SAAR.

8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for 215,000 initial claims, up from 210,000 last week.

8:30 AM: the Philly Fed manufacturing survey for October. The consensus is for a reading of 7.1, down from 12.0.

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for September.

This graph shows industrial production since 1967.

The consensus is for a 0.2% decrease in Industrial Production, and for Capacity Utilization to decline to 77.8%.

----- Friday, Oct 18th -----
10:00 AM: State Employment and Unemployment (Monthly) for September 2019

by Calculated Risk on 10/11/2019 07:47:00 PM

From SacRealtor.org: Sales volume declines for September, median sale price flat

September closed with 1,393 sales, an 11.1% decrease from August’s 1,567 sales. Compared to September 2018 (1,318), the current figure is up 5.7%.
...
The Active Listing Inventory decreased slightly from 2,460 to 2,457 units. The Months of Inventory increased from 1.6 to 1.8 Months. This figure represents the amount of time (in months) it would take for the current rate of sales to deplete the total active listing inventory. [Note: Compared to September 2018, inventory is down 24.1%] .
...
The Median DOM (days on market) remained at 12 and the Average DOM remained at 25. “Days on market” represents the days between the initial listing of the home as “active” and the day it goes “pending.” Of the 1,393 sales this month, 74.2% (1,034) were on the market for 30 days or less and 90.1% (1,246) were on the market for 60 days or less.
emphasis added

1) Overall sales increased to 1,393 in September, up from 1,318 in September 2018. Sales were down 11.1% from August 2019 (previous month), and up 5.7% from September 2018.

2) Active inventory was at 2,457, down from 3,236 in September 2018. That is down 24.1% year-over-year.  This is the fifth consecutive YoY decline following 20 months of YoY increases in inventory.

This is another market that picked up in September.

by Calculated Risk on 10/11/2019 01:23:00 PM

From Merrill Lynch:

Misses in construction spending and trade coupled with negative revisions to capex data sliced 0.3pp from 3Q GDP tracking this week, leaving us at 1.6% qoq saar. [Oct 11 estimate]
emphasis added

From the NY Fed Nowcasting Report

The New York Fed Staff Nowcast stands at 2.0% for 2019:Q3 and 1.3% for 2019:Q4. [Oct 11 estimate].

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2019 is 1.7 percent on October 9, down from 1.8 percent on October 4. [Oct 9 estimate]

CR Note: These estimates suggest real GDP growth will be just under 2.0% annualized in Q3.

by Calculated Risk on 10/11/2019 11:22:00 AM

From Dodge Data Analytics: Dodge Momentum Index Posts Gain in September

The Dodge Momentum Index moved 4.1% higher in September to 143.6 (2000=100) from the revised August reading of 137.9. The Momentum Index, issued by Dodge Data & Analytics, is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.

The gain in September was due entirely to an 8.9% increase in the commercial component, while the institutional component fell 4.8%.

For the third quarter, the overall Momentum Index averaged 140.1, a scant increase of 0.7% from its average in the previous quarter. Compared to the third quarter of 2018, however, the Momentum Index is 8.6% lower with the commercial component 3.7% lower than a year ago and the institutional component down 16.2%. While the dollar volume of projects in planning is certainly lower than it was a year ago, the index has moved more sideways than downward over the last two quarters.
emphasis added

Click on graph for larger image.

This graph shows the Dodge Momentum Index since 2002. The index was at 143.6 in September, up from 137.9 in August.

According to Dodge, this index leads "construction spending for nonresidential buildings by a full year".  After declining late last year, this index has moved mostly sideways in 2019.

by Calculated Risk on 10/11/2019 09:05:00 AM

From HotelNewsNow.com: STR: US hotel results for week ending 5 October

The U.S. hotel industry reported negative year-over-year results in the three key performance metrics during the week of 29 September through 5 October 2019, according to data from STR.

In comparison with the week of 30 September through 6 October 2018, the industry recorded the following:

• Occupancy: -3.9% to 68.1%
• Average daily rate (ADR): -3.8% to US$129.21
• Revenue per available room (RevPAR): -7.5% to US$88.00

STR analysts attribute significant performance decreases in many markets to the Rosh Hashanah calendar shift. Travel and conference schedules during the comparable time period last year were not affected by the Jewish holidays.
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Click on graph for larger image.

The red line is for 2019, dash light blue is 2018 (record year), blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).

Occupancy has been solid in 2019, and close to-date compared to the previous 4 years.

However occupancy will be lower this year than in 2018 (the record year).

Seasonally, the 4-week average of the occupancy rate will now increase during the Fall business travel season.

Data Source: STR, Courtesy of HotelNewsNow.com