Chillin' out till it needs to be funded
Orders for both Defense and Non Defense Aircraft rose a sharp 8% from less than 5% in May to keep Durable orders steady 1.6% on May and May itself was also a M/M rise of 1.6%. However, closings of existing Homes dropped to an abysmal 50,000 completions keeping the supply of New and Existing homes tight and a refinancing led mortgage boom that saves the President’s Election Campaign could still be troubled in the few remaining days from the seesaw growth as GDP reports this morning put Q2 growth at 1.5% and a GDP price rise index also from 2% to 1.6%
Pending Home Sales Index yesterday fell to a 99.3 below 101 for June9closings for existing home sales) adding to the woes of new construction being incomplete in many cases as the industry gets careful with not too many houses in hand. Earlier in may the data had shown at5.9% increase in the Pending Home Sales Index
Fed Balance Sheet update showed another small decrease in the Fed onion of $2.853 T but Money supply was better by more than $40 B. Last week’s Treasury auctions and foreign interest was also exceptionally robust but unlikely to rush into an inflationary maelstrom as Dollar is upset by the Euro as the likely candidate for a regular liquidity rush to boost commodities.
US is largely self sufficient in Oil and lack of demand keeps the Election year performance likely among the dimmest in comparison. A Euro liquidity rush would also keep the US Economy better off though Capital goods trade are unlikely to recover and the better US Economy could then push back talk about a permanent deflation scenario and get on the Freeways again.