Regional Fed Manufacturing Overview: July Remains Negative
U.S. Homeownership Rate Falls to Five-Decade Low But household formation climbs as more Americans look to rent
(…) The homeownership rate, the proportion of households that are owner-occupied, fell to 62.9%, half a percentage point lower than the second quarter of 2015 and 0.6 percentage point lower than the first quarter 2016, the Census Bureau said on Thursday. That was the lowest figure since 1965.
(…) the homeownership rate for 18- to 35-year-olds slipped to 34.1%, the lowest level in records dating to 1994.
At 77.9%, the homeownership rate was highest for those 65 years and over.
But the broader picture suggests a degree of economic strength: Renters are spurring a steady increase in overall household formation. Renter-occupied housing units jumped by 967,000 from the same period a year earlier. Overall, household formation has been fairly steady since the early days of the expansion. (…)
Down the road, renters will likely look to become buyers, spurring a housing market that already appears constrained by rising prices and limited inventories.
CalculatedRisk has the chart:
Oil Prices Continue to Fall in Flooded Market A gasoline glut, rising output from OPEC and signs of increased U.S. production continue to take their toll on Brent and West Texas Intermediate crude oil.
Brent crude, the global oil benchmark, fell 1.2% to $42.71 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 1% at $40.74 a barrel.
A combination of an expanding global gasoline glut, early signs of increasing production in the U.S., and rising output from the Organization of the Petroleum Exporting Countries have dragged down oil prices by around 20% since they broke above $50 in June. (…)
The market was caught off-guard by an unexpected rise in weekly U.S. gasoline stocks which showed inventories rose 452,000 barrels to hit 241.5 million barrels in the week ended July 22. The increase comes at a time when stocks are usually being drawn. (…)
Support from temporary factors including Canadian wildfires, oil workers on strike in Kuwait and militant attacks in Nigeria that helped oil prices recover since February have now dissipated and the focus has reverted to the overhang of supply.
“In addition to having more rigs drilling, the average productivity of rigs continues to increase,” said the U.S. Energy Information Administration. In the three major oil producing regions of Bakken, Eagle Ford, and Permian, daily productivity picked up by 155 barrels, 226 barrels and 111 barrels, respectively, per well, over the 2015 average.
In June, OPEC crude production increased by 264,000 barrels a day to average 32.86 million barrels, according to the cartel’s monthly report. (…)
Bank of Japan Takes Modest Action The Bank of Japan said it would expand only its buying of exchange-traded funds, a move that disappointed investors and indicated it may have reached the limits of monetary policy.
EARNINGS WATCH
- 295 companies (67.5% of the S&P 500’s market cap) have reported. Earnings are beating by 5.3% while revenues are surprising by 0.9%.
- Expectations are for declines in revenue, earnings, and EPS of -0.6%, -4.2%, and -1.9%, respectively.
- EPS is on pace for -0.2%, assuming the current beat rate for the remainder of the season. This would be +4.2% excluding Energy and the Big-5 Banks. (RBC)