Succinct Summation of the Week's Events

Succinct Summation of the Week’s Events:

Positives,

1)Powell officially endorses that the beginning of rate cuts is here but doesn’t commit to the pace as that of course remains to be seen. Markets though have already well priced this in.

2)The August US services PMI rose to 55.2 from 55.

3)The claims data was about as expected. For the week ended August 17^th, initial claims totaled 232k as forecasted while last week was revised up by 1k to 228k. The 4 week average was 236kvs 237k last week. Continuing claims rose 4k w/o/w to 1.863mm and continues to hover around the highest since November 2021. The estimate was 1.87mm.

4)The July US Architecture Billings Index rose to 48.2 from 46.4, though remaining below the 50 breakeven. They said, "Architecture firms continue to face a billings slowdown. However, the emerging prospects of lower interest rates coupled with a modest uptick in project inquiries suggest that some dormant projects may be revived in the coming months."

5)New home sales in July jumped to 739k annualized, well above the estimate of 623k and up from 668k in June which was revised up from 617k. Almost all of the upside came from the West where it rose by 49k m/o/m. The upside led to a drop in months’ supply to 7.5 from 8.4. Volatile month to month because of mix, the median home price was up 2% y/o/y. Smoothing out the data puts the 3 month average at 691k vs the 6 month average at 689k and the 12 month average at 674k. This added new supply is what the supply constrained existing home sales market needed. In February 2020 for perspective, new home sales were 707k.

6)From Target: "Among the drivers of our comp sales (2%), we're pleased that our 2nd quarter growth was driven entirely by traffic…And we were particularly encouraged to see discretionary category trends improve for the 4th consecutive quarter. In apparel, comp sales grew by more than 3%, marking an improvement of more than 5 percentage points when compared with the 1st quarter."