Succinct Summation of the Week's Events

Succinct Summation of the Week’s Events:

Positives,

1)Initial jobless claims fell 10k w/o/w to 236k and that was 7k under expectations. It follows three straight weeks above 245k. This brings the 4 week average to 245k vs 246k in the week before as a 239k print falls out.

2)The final June UoM consumer confidence index was 60.7, up slightly from the initial print of 60.5 but more notably from the 52.2 seen in May. It was though 70.5 right before the election and ended 2024 at 74. Both main components were up too from May and one yr inflation expectations fell to 5% from 6.6% when tariff concerns reached its peak. The UoM said “The improvement was broad based across numerous facets of the economy, with expectations for personal finances and business conditions climbing about 20% or more.” But, “Consumers continue to be concerned about the potential impact of tariffs, but at this time they do not appear to be connecting developments in the Middle East with the economy.” Also, “About 59% of consumers spontaneously offered comments about tariffs, down modestly from about 66% last month. Still, tariff mentions continue to come from a broad swath of the population and reflect ongoing anxiety that the threat of inflation remains real, even if consumers are no longer bracing for a worst case scenario as they appeared to do so in April and early May.”

3)With the personal income data, looking strictly at private sector pay, they rose .4% m/o/m, the same pace seen in April and up by 4.6% y/o/y vs 4.4% in April.

4)Pending home sales in May rose 1.8% m/o/m after the 6.3% drop in April and 5.5% rise in March, covering the spring selling season. The NAR said, “The Northeast’s housing shortage is boosting home prices, with more than a quarter of homes selling above list price. Conversely, more inventory in the South gives home buyers greater negotiation power. Price declines in the South should be considered temporary given the region’s strong job creation.”

5)With an average 30 yr mortgage rate of 6.88%, up 4 bps w/o/w, purchase applications were little changed, down by .4% w/o/w. Refi's rose 3% though but after falling by 2.1% in the week before.

6)As seen in the April S&P CoreLogic home price index, positive for the first time buyer, home price gains continue to slow with a 2.7% y/o/y increase vs 3.4% in March. On a m/o/m basis, prices fell for a 2^nd month and by down .4%. Of the 20 biggest cities, prices fell from March in 15 of them. Versus last year, prices fell in two of the hotter markets over the past few years, Tampa and Dallas.

7)Core durable goods orders in May rose by 1.7% m/o/m, well more than the estimate of up one tenth. It does though follow a 1.4% drop in April. Order growth was broad, rising for vehicles/parts, computers/electronics, machinery, electrical equipment and metals. The shipments of core goods were up by .5% m/o/m, better than the estimate of down one tenth.