Succinct Summation of the Week's Events

Succinct Summation of the Week’s Events:

Positives,

1)Core retail sales saw a big upside surprise in June with a .9% m/o/m gain vs the forecast of up .2%. That comes after a .4% rise in May that was left unrevised. They are higher by 4.1% y/o/y. 

2)The July Philly index surprised us with a print of +13.9, up from +1.3 in June. The estimate was +2.9. The Philly region has been the positive outlier relative to both its regional peers and the national number as it is now above zero for the 6th straight month. Looking out six months, expectations for growth rose to 38.7 from 13.8 in June and 32.4 in May.

3)Multi family starts (lumpy month to month) totaled 373k in June which is up from 312k in May and vs the multi year low of 258k in March. It touched 627k at the peak in April 2022. Permits for multi family rose to 512k from 443k.

4)Maybe can provide some relief to first time home buyers to mitigate still high mortgage rates, “Home listings are piling up as buyers step back from the peak of home shopping season faster than normal” said Zillow. Their chief economist said, “A growing segment of homes that aren’t competitively priced or well marketed are lingering on the market. Sellers are increasingly cutting prices to entice buyers struggling with affordability.”

5)Refi applications jumped 15.2% after falling in the 4 previous months.

6)Foreigners, led by offshore funds, bought a net $46b of US notes and bonds in May. However, the two largest holders, Japan and China, continued to trim their holdings.

7)US industrial production in June rose .6% m/o/m, twice the estimate because of a lift in manufacturing production mostly due to autos. A jump in utility output helped too.

8)Taiwan Semi's CEO said on its AI chip business, "The demand is so high, I had to work very hard to meet customer demand." On the inventory side, "The supply continues to be very tight all the way into 2025 and hopefully we can ease in 2026...We continue to increase capacity wherever we can, whatever we can."

9)From Bank America: "we highlight the 30 and 90 day plus credit card delinquency trends, which show delinquencies have plateaued for the 2nd consecutive quarter."

10)From DR Horton: "Although inflation and mortgage interest rates remain elevated, the supply of both new and existing homes at affordable price points is still limited, and the demographics supporting housing demand remain favorable. Homebuyer demand during the spring selling season was good, despite continued affordability challenges."