Stocks are higher, with the S&P 500 and Nasdaq at fresh record highs. The Stock market rally and lower Initial Jobless Claims figure today are weighing on the Bond market, which is down slightly. 10-year yields are up 2bp, but better than where they were earlier this morning.
New Home Sales
New Home Sales, which measure signed contracts on new homes, rose 0.6% to a 627,000-unit annualized pace.
The median home price was reported at $401,800, which appeared to be a big decline of almost 5% from the previous reading of $422,700. The media will likely pick this up and say that there was a big drop in home prices…but remember that this is the median or middle priced home sold, so the mix of sales has a big impact. And when looking at the homes that sold, there were 5,000 less homes that sold above $500,000 and 5,000 more homes that sold between $300,000 and $399,000. Because of this mix, the median price was dragged lower.
There were 511,000 new homes for sale at the end of June, which is the highest number since 2007. But a lot of that is just air – only 119,000 are completed and move in ready, while 121,000 have not even been started and 271,000 are still under construction.
Initial Jobless Claims
The BLS reported that Initial Jobless Claims, which measures individuals filing for unemployment benefits for the first time, fell 4,000 to a very low 217,000, which is the lowest reading since April after a string of relatively higher figures. Clearly, layoffs remain muted currently.
Continuing Claims, however, are still very elevated and the highest levels since 2021. They rose 4,000 to 1.955M. This was the ninth report in a row where continuing claims were above 1.9M. While layoffs were lower, as evidenced by the low initial jobless claims figure, once a worker is let go it’s clearly harder to find a job because there is less hiring and they are staying on benefits for longer.
Technical Analysis
Mortgage Bonds broke beneath their 25-day Moving Average yesterday, and moved as low as their 100-day Moving Average this morning, but have since rebounded a bit. The 100-day is holding for now.
The 10-year got as high as 4.4% in the early going, breaking above its 50-day Moving Average. It has since retreated below the 50-day, which is a positive sign and shows it’s holding for now. Unless these levels are violated, we can remain patient.
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