by Calculated Risk on 5/17/2020 07:01:00 PM

Weekend:
• Schedule for Week of May 17, 2020

Monday:
• At 10:00 AM ET, The May NAHB homebuilder survey. The consensus is for an increase to 33 from 30 last month.  Any number below 50 indicates that more builders view sales conditions as poor than good.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 8 and DOW futures are up 88 (fair value).

Oil prices were up over the last week with WTI futures at $30.03 per barrel and Brent at $33.29 barrel.  A year ago, WTI was at $63, and Brent was at $74 - so WTI oil prices are down over 50% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $1.88 per gallon. A year ago prices were at $2.86 per gallon, so gasoline prices are down $0.98 per gallon year-over-year.

by Calculated Risk on 5/17/2020 05:50:00 PM

From Dr. Bill Foege (former Director of CDC) in the Atlanta Journal-Constitution: Opinion: Lessons of Smallpox eradication and COVID-19

Contact tracing and isolation were hallmarks of the smallpox program with labor-intensive work before computers and smart phones were available for workers. In a single state in India, in May 1974, they reported 1,500 new cases a day. That required 1,500 new investigations each day, with the isolation of cases, the locating of contacts, vaccination of contacts and isolation of those with symptoms until a diagnosis could be made. It required tens of thousands of people simply to act as watch guards of the homes of cases and to vaccinate all visitors. All of this with difficult communications and yet currently we hear that contact tracing is not possible until the numbers of cases are reduced. Of course, the diseases are different. A vaccine and the lack of subclinical cases favored smallpox work. However, the approaches to control are similar. A current problem is that testing remains inadequate months after the problem was defined.

In late April, Dr. Fauci said the US might be able to test 400,000 to 600,000 people per day, and this is the first day in that range.   This might be close to enough to allow test-and-trace.

However, the US might need more than 900,000 tests per day according to Dr. Jha of Harvard's Global Health Institute.

There were 422,024 test results reported over the last 24 hours.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 5.0% (red line). The US probably needs enough tests to keep  the percentage positive well below 5%. (probably much lower based on testing in New Zealand).

NOTE: A few states are apparently including antibody tests with virus tests. The Covid tracking project is working to straighten that out.

by Calculated Risk on 5/16/2020 05:25:00 PM

The US might be able to test 400,000 to 600,000 people per day sometime in May according to Dr. Fauci - and that might be enough for test and trace.

However, the US might need more than 900,000 tests per day according to Dr. Jha of Harvard's Global Health Institute.

There were 356,994 test results reported over the last 24 hours.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 7.0% (red line). The US probably needs enough tests to keep  the percentage positive well below 5%. (probably much lower based on testing in New Zealand).

NOTE: A few states are apparently including antibody tests with virus tests. The Covid tracking project is working to straighten that out.

by Calculated Risk on 5/16/2020 08:11:00 AM

The key reports this week are April Housing Starts and Existing Home Sales.

For manufacturing, the May Philly Fed manufacturing survey will be released.

Fed Chair Jerome Powell testifies before the Senate Banking Committee on Tuesday.

----- Monday, May 18th -----
10:00 AM: The May NAHB homebuilder survey. The consensus is for an increase to 33 from 30 last month .  Any number below 50 indicates that more builders view sales conditions as poor than good.

----- Tuesday, May 19th -----
8:30 AM ET: Housing Starts for April.

This graph shows single and total housing starts since 1968.

The consensus is for 0.950 million SAAR, down from 1.216 million SAAR in March.

10:00 AM, Testimony, Fed Chair Jerome Powell, Coronavirus Aid, Relief, and Economic Security Act, Before the Senate Banking, Housing, and Urban Affairs Committee, U.S. Senate

----- Wednesday, May 20th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

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

2:00 PM: FOMC Minutes, Meeting of April 28-29, 2020

----- Thursday, May 21st -----
8:30 AM ET: The initial weekly unemployment claims report will be released. The consensus is for a 2.500 million initial claims, down from 2.981 million the previous week.

8:30 AM: the Philly Fed manufacturing survey for May. The consensus is for a reading of -45.0, up from -56.6.

10:00 AM: Existing Home Sales for April from the National Association of Realtors (NAR). The consensus is for 4.30 million SAAR, down from 5.27 million.

The graph shows existing home sales from 1994 through the report last month.

Housing economist Tom Lawler expects the NAR to report sales of 4.17 million SAAR for April.

2:30 PM, Speech, Fed Chair Jerome Powell, Opening Remarks, At Fed Listens: How is COVID-19 Affecting Your Community?

----- Friday, May 22nd -----
10:00 AM: State Employment and Unemployment (Monthly) for April 2020

by Calculated Risk on 5/15/2020 05:50:00 PM

The COVID Tracking Project put out an important statement today: Position Statement on Antibody Data Reporting

Earlier this week, we learned that for several weeks, the Commonwealth of Virginia has been combining viral test data with antibody test data in their public reporting on COVID-19. Virginia officials suggested that other states were pooling these two types of results so that, in essence, Virginia was forced to combine them to keep up.

On May 13, 2020, we contacted 44 states and territories without clear statements about their antibody test reporting policy. As of May 15, we have confirmed that at least two states besides Virginia have been combining antibody and viral test results, though only Virginia's health department is on the record about combining their testing datasets. If more states are, in fact, combining viral and antibody results, we understand that they are making a choice that appears to increase their test totals. But we think it comes at much too high a price.

As antibody tests become more widely available across the United States, every state and territory will have to choose how to report this data to the public. We encourage all states and territories to standardize on reporting antibody and viral test results separately and fully, allowing government departments, journalists, and members of the public to maintain access to the most meaningful numbers throughout the COVID-19 outbreak in the United States.
emphasis added

This means the number of tests being reported is too high, and the percent positive is probably higher than being reported. Hopefully the states will separate the tests in all reporting.

The US might be able to test 400,000 to 600,000 people per day sometime in May according to Dr. Fauci - and that might be enough for test and trace.

However, the US might need more than 900,000 tests per day according to Dr. Jha of Harvard's Global Health Institute.

There were 378,410 test results reported over the last 24 hours.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 6.9% (red line). The US probably needs enough tests to keep  the percentage positive well below 5%. (probably much lower based on testing in New Zealand).

by Calculated Risk on 5/15/2020 04:50:00 PM

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 4.17 million in April, down 20.6% from March’s preliminary pace and down 20.1% from last April’s seasonally adjusted pace.

I should note that this “earlier than normal” estimate is based on a smaller sample than my normal “early read.” In addition, there are huge differences in sales figures not just across states but within states, with much of the differences reflecting how states were affected by and how state governments responded to the pandemic. As such, this estimate is subject to greater than normal “sampling error.”

On the inventory front, local realtor/MLS data, as well as data from other inventory trackers, suggest that the inventory of existing homes for sale at the end of April will be 7down about 15.0% from a year earlier. Finally, local realtor/MLS data suggest that the median US existing single-family home sales price last month was up by about 8.3% from last April.

Here are a few other observations: first, while not all realtor reports break out sales by type of property (e.g., single-family detached vs. condo/townhomes), almost all that do reported a significantly larger YOY decline in condo/townhome sales than in single-family detached sales.

Second, while not all realtor reports include data on new pending sales – and some that do often revise those data significantly – it is worth nothing that almost all realtor reports with new pending sales data showed a significantly larger YOY drop in pending sales than in closed sales. E.g., of the realtor reports than included new pending sales, the combined closed sales in those reports were down 20% YOY while combined pending sales were down 34% YOY.

CR Note: The National Association of Realtors (NAR) is scheduled to release April existing home sales on Thursday, May 21, 2020 at 10:00 AM ET. The consensus is for 4.30 million SAAR.

by Calculated Risk on 5/15/2020 01:57:00 PM

From the NMHC: NMHC Rent Payment Tracker Finds 87.7 Percent of Apartment Households Paid Rent as of May 13

The National Multifamily Housing Council (NMHC)’s Rent Payment Tracker found 87.7 percent of apartment households made a full or partial rent payment by May 13 in its survey of 11.4 million units of professionally managed apartment units across the country.

This is a 2.1-percentage point decrease in the share who paid rent through May 13, 2019 and compares to 85.0 percent that had paid by April 13, 2020. These data encompass a wide variety of market-rate rental properties across the United States, which can vary by size, type and average rental price.

“Once again, despite the economic and health challenges facing so many, we have found that apartment residents who live in professionally managed properties are meeting their obligations,” said Doug Bibby, NMHC President. “But it’s important to understand that our metric does not capture rent payments for smaller landlords or for affordable and subsidized properties. These excluded properties are the ones more likely to house residents experiencing financial stress. In addition, as current federal support programs begin to reach their limit, it will be even more critical for Congress to enact a meaningful renter assistance program. It’s the only way to avoid adding a housing crisis to our health and economic crisis.”
emphasis added

CR Note: It appears most people are still paying their rent.   This was a higher percentage than in April (at the same point in the month), and only down 2.1 percentage points from a year ago.  (Commercial is a different story).

by Calculated Risk on 5/15/2020 12:42:00 PM

Important: GDP is reported at a seasonally adjusted annual rate (SAAR). So a 30% Q2 decline is around 7% decline from Q1 (SA).

From Merrill Lynch:

We are tracking -5.2% qoq saar for 1Q GDP and expect a -30% qoq saar plunge in 2Q. [SAAR May 15 estimate]
emphasis added

From the NY Fed Nowcasting Report

The New York Fed Staff Nowcast stands at -31.1% for 2020:Q2. [May 15 estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2020 is -42.8 percent on May 15, down from -34.9 percent on May 8. [May 15 estimate]

by Calculated Risk on 5/15/2020 12:35:00 PM

Earlier from the NY Fed: Empire State Manufacturing Survey

Business activity continued to deteriorate significantly in New York State, according to firms responding to the May 2020 Empire State Manufacturing Survey. The headline general business conditions index climbed thirty points, but remained well below zero at -48.5.
...
After plunging last month, the index for number of employees increased nearly 50 points to -6.1, suggesting that after declining sharply last month, employment levels fell somewhat further in May. The average workweek index also increased, but at -21.6, the index pointed to ongoing declines in hours worked.
emphasis added

This was another weak report and suggests activity continued to "deteriorate significantly" in May.

by Calculated Risk on 5/15/2020 10:18:00 AM

Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.

From Black Knight: 4.7M Homeowners Now in Forbearance, But Pace is Slowing Considerably

• As of May 12, approximately 4.7 million homeowners are in forbearance plans, up from a revised 4.5 million one week prior.

• The pace of new forbearance plans has slowed considerably – there was an average net increase of just under 26K per day over the past week. That’s a reduction of more than 85% of the rate we saw back in early April.

• Using a momentum-based approach based on the one-week average and assuming an optimistic 10% daily decline moving forward, we would see 4.9 million loans in forbearance by the end of May (9.2% of active mortgages) and just under 5 million (9.4%) by the end of June.

• A more pessimistic scenario, in which the two-week average rolls forward and the 10% daily decline doesn’t manifest until June 15th, could result in as many as 5.4 million loans (10.1%) in forbearance by the end of the month, and nearly 6.3 million (11.8%) by the end of June.

• Together, the 4.66M represent 8.8% of all active mortgages and more than $1 trillion in unpaid principal.