Chillin' out till it needs to be funded
A battered set of global Financial markets were likely pleasantly surprised by US housing data after Europe could not hang on to gains in the afternoon. That means a better global financial markets opening tomorrow as US Housing starts, holding on to gains in Multi-family (rental) units to report a 30% Y/Y gain to 717,000 units an hour back. That gain in housing starts came despite a 20% contraction in the North East ( New York, Boston and Connecticut) with the South encouragingly growing 11.6%. Single Family Housing isn’t badly off either seemingly.
The M/M increase in Housing starts was a respectable 2.6 % up in April decimating the same decline in March. housing int he Midwest is up 8% while the West s down 5%. Permits also rose to 715,000 for the month. In the permits as always, Single Family units continued to show an uptick that does not translate into closings
Yesterday the Housing Market Index opened up anew front with a 5 point rise to 29 bringing more optimists back to an active economic life as another housing recovery cycle starts from here for a few months. Gold, Silver and base metals made sudden comebacks from the suspect bottom in the new paradigm where the Euro will likely trade below 1.27 soon
Global Capital flows are headed for the Emerging Markets led by Asia as other Financial markets run out of steam. the US had $23.9 bln in Net Foreign purchases of US securities including Investment Grade bonds and a $13.9 B Foreign securities it sold in March reported yesterday
John Paulson seems to be out of coin too as he cashes in chips ata new $12 mln investment in a casino exiting his agri portfolio holding in Mosaic. Buffet’s change of heart has already been discussed much with his additional Wells Fargo investments turning up in the 13F reports of Hedge Funds. Our take on that, well M&A is not picking up and they have a lot of time on hand to change portfolios as it will be a long summer. meanwhile the euro zone confirmed in so many ways that except for the Greek populace no other have real hopes of Greece staying a part of the Euro union for long readying Global markets for a changeover to a Euro without Greece, mostly gladdening US Fund managers and Economists who were never sold on the concept of a unified hegemony of nations just based on currency ( fiscal) unity without a politically common charter
Retail sales were the usual hit and miss and with lower expectations on sales and a lower inflation peg it is mostly down for US retail including JC Penney and Target while Amazon catches fire in more portfolios. Consumption dulling haas deleted most Exports growth in the US and many import categories in China and Japan even as US retailers are running against time to stock up on larger inventory with Sales and the Inventory sales ratio still trended to 31 from 32 last month Consumer Goods growth Y/Y remained the concern in the G17 Industrial Out report from the Fed today as Y/Y growth in Business Equipment was nearly 12% out of the 5.2% growth in the Fed index to 97.2 for April. Manufacturing overall grew 5.8% Y/Y and 0.6% in April alone with Car manufacturing leading with a 3.1% growth. Construction equipment and supplies were up 6.5%
Shareholder suits against JP Morgan for misrepresentation of risk and eve Berkshire’s continuing sale of Walmart, P&G Viacom, Kraft and Intel holdigns would have weighed heavily on markets earlier before the Housing data meant recovery was on for Global markets to corresponsdingly trya nd drown out Euro noise starting tomorrow.