by Calculated Risk on 4/27/2015 09:34:00 PM

Tuesday:
• At 9:00 AM ET, S&P/Case-Shiller House Price Index for February. Although this is the February report, it is really a 3 month average of December, January and February prices. The consensus is for a 4.6% year-over-year increase in the National Index for February. The Zillow forecast is for the National Index to increase 4.5% year-over-year in February, and for prices to increase 0.5% month-to-month seasonally adjusted.

• At 10:00 AM, the Richmond Fed Survey of Manufacturing Activity for April.

• Also at 10:00 AM, Conference Board's consumer confidence index for April. The consensus is for the index to increase to 102.5 from 101.3.

• Also at 10:00 AM, the Q1 Housing Vacancies and Homeownership report from the Census Bureau. This report is frequently mentioned by analysts and the media to report on the homeownership rate, and the homeowner and rental vacancy rates. However, this report doesn't track with other measures (like the decennial Census and the ACS).

by Calculated Risk on 4/27/2015 06:21:00 PM

Freddie Mac reported that the Single-Family serious delinquency rate declined in March to 1.73%, down from 1.81% in February. Freddie's rate is down from 2.20% in March 2014, and the rate in March was the lowest level since December 2008.

Freddie's serious delinquency rate peaked in February 2010 at 4.20%.

These are mortgage loans that are "three monthly payments or more past due or in foreclosure". 

Note: Fannie Mae will report their Single-Family Serious Delinquency rate for March in a few days.

Click on graph for larger image

Although the rate is declining, the "normal" serious delinquency rate is under 1%. 

The serious delinquency rate has fallen 0.47 percentage points over the last year - and the rate of improvement has slowed recently - but at that rate of improvement, the serious delinquency rate will not be below 1% until late 2016.

So even though distressed sales are declining, I expect an above normal level of Fannie and Freddie distressed sales through 2016 (mostly in judicial foreclosure states).

by Calculated Risk on 4/27/2015 04:40:00 PM

The FOMC meeting starts tomorrow and the statement will be released Wednesday at 2:00 PM ET. No change in policy is expected.

Here is a preview from Merrill Lynch:

At the March FOMC meeting, the Fed took any policy changes in April off the table. We don’t expect similar language about June policy at the April meeting. We do expect a more somber description of recent activity. This dovish shift in the nearterm view should translate into significantly lower odds of a June rate hike in our view. But any market participants who seek an explicit signal that June also is off the table are likely to be disappointed: the FOMC will want to maintain as much policy flexibility as possible. Fed officials also should stay optimistic about reaching their dual mandate objectives over time. The minutes, released in three weeks’ time, are once again likely to be more informative about the state of the Fed debate.

Without a press conference or updated projections in April, the FOMC statement will be the focus. The main change is likely to be an acknowledgment of the broadly weaker data for consumption, manufacturing and the labor market in recent months. The Committee may suggest temporary factors (i.e., weather and the West Coast port shutdown) account for much of the 1Q slowdown and thus leave the mediumterm outlook unchanged. Meanwhile, the recent firming of core inflation measures may give the FOMC more confidence that downside inflation risks — which rose in the March SEP — have faded. As such, we look for no significant changes in the inflation outlook, although we continue to believe the Fed is under-estimating the persistence of global disinflationary forces.

The March statement dropped “patient,” which had been generally interpreted to mean no rate hikes for the current and subsequent meeting, in order to have more flexibility for setting policy at the June meeting and beyond. To make certain the markets didn’t misinterpret the change in guidance as a sign of imminent liftoff, the FOMC stated that an April rate hike remained “unlikely” and that dropping “patient” did not mean the FOMC had decided on the timing of liftoff. As these clarifications are no longer needed, we expect they will be dropped. The statement may add that the Fed anticipates a “gradual” normalization process, to complement existing language that economic conditions may warrant lower-than-normal policy rates for some time. We expect no changes to the reinvestment program.

by Calculated Risk on 4/27/2015 01:11:00 PM

The automakers will report April vehicle sales on Friday, May 1st. Sales in March were at 17.05 million on a seasonally adjusted annual rate basis (SAAR), and it appears sales will be strong in April too.  April sales (SA) will probably be the best since 2005.

Note:  There were 26 selling days in April, the same as last year.  Here are a couple of forecasts:

From WardsAuto: Forecast: April Daily Sales to Reach 13-Year High

A WardsAuto forecast calls for U.S. automakers to deliver 1.474 million light vehicles this month.

The forecasted daily sales rate of 56,706 over 26 days represents a 6.7% improvement from like-2014 (also 26 days) and would mark the industry’s best April, on a daily basis, since 2002, as well as the highest April sales volume since 2000.
...
The report puts the seasonally adjusted annual rate of sales for the month at 16.8 million units, down from March’s 17.1 million SAAR, but some 800,000 units above year-ago and slightly ahead of the 16.8 million first-quarter SAAR.

From J.D. Power: New-Vehicle Sales in April Strongest for the Month in a Decade

Total light-vehicle sales are projected to reach 1,463,700, a 5 percent increase compared with April 2014 and the highest level for the month since April 2005 when 1,500,624 new vehicles were sold. [Total forecast 16.6 million SAAR]

Another strong month for auto sales.

by Calculated Risk on 4/27/2015 10:36:00 AM

From the Dallas Fed: Texas Manufacturing Activity Weakens Again

Texas factory activity declined in April, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, posted a second negative reading in a row, coming in at -4.7.

Other measures of current manufacturing activity also reflected continued contraction in April. The new orders index edged up but remained negative at -14. The growth rate of orders index held steady at -15.5, posting its sixth consecutive negative reading.
...
Perceptions of broader business conditions remained quite pessimistic for a fourth month in a row. The general business activity index stayed negative but ticked up to -16 in April, while the company outlook index moved down to -7.8, reaching its lowest reading in nearly two and a half years.

Labor market indicators reflected slight employment gains but shorter workweeks. The April employment index rebounded to 1.8 after dipping below zero last month.
emphasis added

The last of the regional Fed surveys (Richmond Fed) will be released tomorrow. Three of the four surveys released so far have indicated contraction in April (especially Dallas due to lower oil prices).