Pending Home Sales Slip in November The number of homes tentatively sold across the U.S. fell in November, a sign the housing market hit a rough patch this winter after strengthening earlier in the year.
Pending home sales, measuring contracts before they become final, slipped 0.9% in November from a month earlier to a reading of 106.9, the National Association of Realtors said Wednesday. An index of 100 is equal to the average level of contract activity during 2001, which the NAR considers a “normal,” or balanced, market for the current U.S. population.
(…) pending sales declined 3% in the Northeast and 5.5% in the West last month from the prior month. Sales rose 1% in the Midwest and 1.3% in the South. (Chart from Haver Analytics)
So, the weak November existing home sales (measured at closing) were not only caused by the new mortgage regs. Although the index has increased year-over-year for 15 consecutive months, last month’s annual gain was the smallest since October 2014 (2.6%). Here in South Florida, realtors are surprised at how slow activity is at this time.
From Doug Short:
Pending versus Existing Home Sales
The NAR explains that “because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing Home Sales by a month or two.” Here is a growth overlay of the two series. The general correlation, as expected, is close. And a close look at the numbers supports the NAR’s assessment that their pending sales series is a leading index.
(…) By early evening in Moscow, the rouble was trading 1.2 per cent weaker, at Rbs73.1570 to the dollar, down 26 per cent since the start of the year. (…)
Russian government data showed that the economy contracted month-on-month in November for the first time in five months. (…)
Government data published this week showed that real wages were down 9.2 per cent year-on-year in the first eleven months of 2015. That marks the first such fall since the economic turmoil of the late 1990s.
Sales of consumer goods — from food to cars — have fallen sharply, with retail sales down 13.1 per cent year-on-year in November. And according to state-owned pollster VTsIOM, 39 per cent of Russian households cannot afford to buy either sufficient food or clothing — up from 22 per cent a year ago. (…)
Ominous ticking: the Kremlin’s clock
Vladimir Putin claims that Russia’s economic crisis has already bottomed out. But the latest data suggest otherwise: industrial production, real wages and GDP all fell in November compared with October; the rouble is hitting new yearly lows. Unless oil prices rebound, the Kremlin will have to axe social spending in 2016. National parliamentary elections loom in the autumn. Although Mr Putin’s personal support remains ironclad, fraud during the last such vote in 2011 helped spark mass protests. To mitigate any potential unrest, the Kremlin may opt for more of the foreign adventurism (see: Ukraine, Syria) in which many Russians now take great pride. If the sight of military might fails to counterbalance falling living standards, then repression, or at least its spectre, may do the trick. Russian lawmakers recently floated an initiative to grant security forces the right to fire on crowds, ostensibly to prevent acts of terror. (The Economist)
The worst flooding across the U.S. Midwest in four years has shut some oil pipelines and terminals near St. Louis, potentially swelling a glut of crude and extending this year’s price slide.
Five miles of the Mississippi River and 50 miles of the Illinois River have been shut, according to the U.S. Coast Guard website. The flooding is the worst since May 2011, when rising water on the Mississippi and its tributaries threatened refinery and chemical operations and disrupted shipping.
So far, the biggest shutdown is Enbridge Inc.’s Ozark oil pipeline, which was booked to carry about 200,000 barrels a day this month to Wood River, Illinois, from Cushing, Oklahoma. The outage of the section under the Mississippi River may further add to stockpiles at Cushing that reached a record high last week. (…)
Better luck next year: financial markets
Investors will write off 2015 as a disappointment: barely any money was made in any category and big losses were suffered in some, notably emerging markets and commodities. Low bond yields and near-zero interest rates in many countries will make it difficult for investors in cash or fixed-interest securities to earn much next year. But equity markets often start the year in bullish mood. The main hope is that economic growth in the developed world will pick up as lower commodity prices boost consumer spending and the drag of tighter fiscal policy starts to fade. The Federal Reserve’s decision to raise interest rates before Christmas was, in essence, a gamble that economic conditions are returning to normal. The outlook for emerging economies is less promising, but all the bad news may already be reflected in prices; the MSCI emerging-market index has fallen in four of the past five calendar years. (The Economist)
In a move that will surely raise even more eyebrows if not launch a shockwave across Palo Alto just yet, Fidelity Investments said in its monthly holdings report that it has slashed the valuations of even more unicorns, starting with the biggest one of all, Uber, when it lowered the value of its stake in the company’s Series D shares by 7.5% from Oct. 30-Nov. 30, while adding more pain to Dropbox investors when it lowered its value of the cloud service company by another -2.2%.
