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Did existing home sales peak in 2021?

The National Association of Realtors reported that existing home sales for December came in as a miss of estimates at 6.18 million
The post Did existing home sales peak in 2021? appeared first on HousingWire.



The National Association of Realtors reported that existing home sales for December came in as a miss of estimates at 6.18 million. This number is in line with my sales range for 2021 of 5.84 million to 6.2 million, but a tad higher than my existing home sales range for 2022, which is between 5.74 million and 6.16 million.

From NAR:

In the last few months of the year, existing home sales have been outperforming my sales ranges noticeably, and I talked about how sales could moderate, but mortgage demand ended 2021 on a solid note.

As I have stressed for many years, years 2020-2024 would differ from what we saw from 2008-2019 due to demographics. More Americans bought homes in 2020 and 2021 than any single year from 2008 to 2019, which looks normal. I have never been a housing sales boom person because I don’t believe we can have a credit boom in America like we saw from 2002 to 2005. However, total home sales — new and existing — during 2020-2024 should be 6.2 million and higher, and so far, two out of five years have checked that box. This is something that couldn’t have happened from 2008 to 2019.

The only thing that can drive total home sales below 6.2 million is if home prices accelerate above my five-year cumulative growth rate of 23% and mortgage rates rise. The downside for housing is that my five-year price growth model has been broken in just two years. I stressed early in 2021 that people should have been more concerned about home prices overheating in 2021 than a forbearance market crash.

Still, we live in a society where professional doomsday grifting is how adults want to be remembered. The housing bubble boys of 2012-2020 turned into the forbearance crash bros of 2021 and have been nothing but an epic disaster in their forecast, which has now ended with the lost decade of bad housing calls.

The concern in 2021 should have always been priced overheating, not crashing back to 2012 levels.  As you can see below from the charts the NAR has provided, the housing crash of 2021 never occurred. The exact opposite did, however.

When people ask why it seems like I’m rooting for higher rates, the truth is that I believe in balance, and once the balance breaks above a trend, the faster it gets back to trend, the better. In 2021, I didn’t discuss the possibility of my crucial level on the 10-year yield breaking above 1.94%. Instead, I focused more on the range mentioned on April 7, 2020 as part of the America’s back recovery model of 1.33%-1.60%, which for the most part was created.

However, 2022 is different, and if global yields can rise together, we have a shot at breaking over 1.94% and sending mortgage rates over 4%. However, still today, even with the hottest economic and inflation data in decades, the 10-year yield as of this minute is at 1.83%.

In my 2022 forecast, my range for the 10-year yield was 0.62%-1.94%, similar to 2021. Accordingly, my upper-end range for mortgage rates is 3.375%-3.625% and the lower end range is 2.375%-2.50%. As I noted then: “This is very similar to what I have done in the past, paying my respects to the downtrend in bond yields since 1981.

“We had a few times in the previous cycle where the 10-year yield was below 1.60% and above 3%. Regarding 4% plus mortgage rates, I can make a case for higher yields, but this would require the world economies functioning all together in a world with no pandemic. For this scenario, Japan and Germany yields need to rise, which would push our 10-year yield toward 2.42% and get mortgage rates over 4%. Current conditions don’t support this.”

As we are getting closer and closer to the spring selling season, we are at fresh new all-time lows in inventory and mortgage rates, and the unemployment rate is below 4% still. Yikes! 

Purchase application data is a very seasonal data line and the bulk of the activity in this data are really from the second week of January to the first week of May. Typically volumes always fall after May. So far, demand is stable and stable demand means it’s unlikely we will see inventory rising at a high velocity.

Remember that we still have COVID-19 comps to deal with until mid-February, so the year-over-year data needs context. Many untrained housing people were pushing for a second-half crash in 2021 due to the purchase application data being negative year over year, which means they made no COVID-19 adjustments due to the high comps in 2020. This is a terrible rookie mistake. Demand picked up toward the end of the year and inventory collapsed.

Now, total inventory levels will rise as they do every spring and summer, just as they fade in the fall and winter. The fundamental goal is to get total inventory levels between 1.52 – 1.93 million to stabilize the market. I know this is historically low inventory, but the market won’t have the prices gains as we have seen in 2020 and 2021. As we can see, we didn’t come close to creating that range in 2021, and now we are at all-time lows in inventory at 920,000 for a country where the total population is running over 322 million today.

The real goal is to get the days on the market to grow. Preferably 30 days or more creates balance. As you can see below, we are far from that type of housing market.

From NAR Research: First-time buyers were responsible for 30% of sales in December; Individual investors purchased 17% of homes; All-cash sales accounted for 23% of transactions; Distressed sales represented less than 1% of sales; Properties typically remained on the market for 19 days.

From NAR Research: Unsold inventory sits at a 1.8-month supply at current sales pace, down from 2.1 months in November and from 1.9 months in December 2020.

As we can see below, the monthly supply — just like the total inventory — has collapsed. For spring and summer, this number will rise like it usually does. 

All in all, 2021 ended the year positively with demand but a terrible note on inventory. I hate that I keep saying that this is the most unhealthy housing market post-2010. However, it’s due to first-world problems: Americans create households, get married, have kids, and buy single-family homes. Americans can move up and down with the nested equity they built over the years, and all American homeowners have a fixed low debt payment cost long term to go along with their rising wages.

Our most outstanding bearish Americans are also housing crashing addicts for some dark reason. I believe that the reason they’re so angry is that people dating, having sex, getting married, having kids, and buying a home just doesn’t reflect the awful America they tend to promote. Valentine’s Day is less than a month away, and I think about the same talking points I use when I have spoken at events over the years: Americans date, mate, get married, and 3.5 years after marriage, they tend to have kids. Housing was always a 2020-2024 story, as currently our most prominent demographic patch in America are ages 28-34.

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5 Top Consumer Stocks To Watch Right Now

Are these consumer stocks a buy amid the earnings season?
The post 5 Top Consumer Stocks To Watch Right Now appeared first on Stock Market News, Quotes,…



5 Trending Consumer Stocks To Watch In The Stock Market Now         

As we tread through the earnings season, consumer stocks could be worth watching in the stock market this week. This would be the case since a number of big consumer names such as Costco (NASDAQ: COST) and Macy’s (NYSE: M) will be posting their financials for the quarter. As such, investors will be keeping an eye on these reports for clues on the strength of consumer spending amid this period of high inflation.

However, despite the soaring prices across the economy, it seems that consumers are surprisingly showing resilience. According to the Commerce Department, retail sales in April outpaced inflation for a fourth straight month. This could suggest that consumers as a whole were not only sustaining their spending, but spending more even after adjusting for inflation. Ultimately, it could be a reassuring sign that consumers are still supporting the economy and helping to diminish the narrative of an incoming recession. With that being said, here are five consumer stocks to check out in the stock market today.

Consumer Stocks To Buy [Or Sell] Right Now


retail stocks (JWN stock)

Starting off our list of consumer stocks today is Nordstrom. For the most part, it is a fashion retailer of full-line luxury apparel, footwear, accessories, and cosmetics among others. The company operates through multiple retail channels, boutiques, and online as well. As it stands, Nordstrom operates around 100 stores in 32 states in the U.S. and three Canadian provinces.

Yesterday, the company reported its financials for the first quarter of 2022. Starting with revenue, Nordstrom pulled in net sales worth $3.47 million for the quarter. This marks an increase of 18.7% from the same quarter last year. Its Nordstrom banner saw net sales rise by 23.5% year-over-year, exceeding pre-pandemic levels. Next to that, its Nordstrom Rack banner saw a 10.3% increase in net sales from last year. Besides, net earnings were $20 million, with earnings per share of $0.13 for the quarter. Considering Nordstrom’s solid quarter, should you invest in JWN stock?

[Read More] Best Stocks To Invest In Right Now? 5 Value Stocks To Watch This Week

The Wendy’s Company

best consumer stocks (WEN stock)

Next up, we have The Wendy’s Company. For the most part, it is the holding company for the major fast-food chain, Wendy’s. Being one of the world’s largest hamburger fast-food chains, the company boasts over 6,500 restaurants in the U.S. and 29 other countries. The chain is known for its square hamburgers, sea salt fries, and the Frosty, a form of soft-serve ice cream mixed with starches. WEN stock is rising by over 8% on today’s opening bell.

According to an SEC filing, Wendy’s largest shareholder, Trian Partners, is looking into making a potential deal with the company. Trian said that it is considering a deal to “enhance shareholder value.” Also, the firm adds that this could lead to an acquisition or business combination. In response, Wendy’s stated that it is constantly reviewing strategic priorities and opportunities. It added that the company’s board will carefully review any proposal from Trian. Given this piece of news, will you be watching WEN stock?

[Read More] 4 Semiconductor Stocks To Watch In The Stock Market Today

Foot Locker

FL stock

Another stock investors could be watching is the shoes and apparel company, Foot Locker. In brief, the company uses its omnichannel capabilities to bridge the digital world and physical stores. As such, it provides buy online and pickup-in-store services, order-in-store, as well as the growing trend of e-commerce. Some of its most notable brands include Eastbay, Footaction, Foot Locker, Champs Sports, and Sidestep. Last week, the company reported its results for the first quarter of the year.

For starters, total sales came in at $2.175 billion, a slight uptick compared to sales of $2.153 billion in the year prior. Next to that, Foot Locker reported a net income of $133 million. Accordingly, adjusted earnings per share came in at $1.60, beating Wall Street’s expectations of $1.54. CEO Richard Johnson added, “Our progress in broadening and enriching our assortment continues to meet our customers’ demand for choice. These efforts helped drive our strong results in the first quarter, which will allow us to more fully participate in the robust growth of our category going forward.”  As such, is FL stock one to add to your watchlist? 

Tyson Foods 

TSN stock

Tyson Foods is a company that built its name on providing families with wholesome and great-tasting protein products. Its segments include Beef, Pork, Chicken, and Prepared Foods. With some of the fastest-growing portfolio of protein-centric brands, it should not be surprising that TSN stock often comes to mind when investors are looking for the best consumer stocks to buy. 

Earlier this month, Tyson Foods provided its fiscal second-quarter financial update. The company’s total sales for the quarter were $13.1 billion, representing an increase of 15.9% compared to the prior year’s quarter. Meanwhile, its GAAP earnings per share climbed to $2.28, up 75% year-over-year. According to Tyson, these financial figures are a reflection of the increasing consumer demand for its brands and products. To top it off, the company was also able to reduce its total debt by approximately $1 billion. Thus, does TSN stock have a spot on your watchlist?

[Read More] Stock Market Today: Dow Jones, S&P 500 Rise, Wendy’s Stock Gains On Potential Deal


food delivery stocks (DASH Stock)

DoorDash is a consumer company that operates an online food ordering and delivery platform. In fact, it is one of the largest delivery companies in the U.S. and enjoys a huge market share. The company connects hundreds of thousands of merchants to over 25 million consumers in the U.S., Canada, Australia, and Japan through its local logistics platform. Accordingly, its platform allows local businesses to thrive in today’s “convenience economy,” as the company puts it.

On May 5, the company reported its first-quarter financials for 2022. Diving in, it posted a revenue of $1.5 billion, growing by 35% year-over-year. This was driven by total orders that grew by 23% year-over-year to $404 million. Along with that, it reported a GAAP gross profit of $662 million, an increase of 34% year-over-year. The company said that it added more consumers than any quarter since Q1 2021, due in part to the growth of its DashPass members. The growth in Monthly Active Users and average order frequency has helped it gain share in the U.S. Food Delivery category this quarter as well. Given DoorDash’s performance for the quarter, should you watch DASH stock?

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Philly Fed: State Coincident Indexes Increased in 50 States in April

From the Philly Fed: The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for April 2022. Over the past three months, the indexes increased in all 50 states, for a three-month diffusion index of 100. Additiona…



From the Philly Fed:
The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for April 2022. Over the past three months, the indexes increased in all 50 states, for a three-month diffusion index of 100. Additionally, in the past month, the indexes increased in all 50 states, for a one-month diffusion index of 100. For comparison purposes, the Philadelphia Fed has also developed a similar coincident index for the entire United States. The Philadelphia Fed’s U.S. index increased 1.1 percent over the past three months and 0.3 percent in April.
emphasis added
Note: These are coincident indexes constructed from state employment data. An explanation from the Philly Fed:
The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing by production workers, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.
Click on map for larger image.

Here is a map of the three-month change in the Philly Fed state coincident indicators. This map was all red during the worst of the Pandemic and also at the worst of the Great Recession.

The map is all positive on a three-month basis.

Source: Philly Fed.

Philly Fed Number of States with Increasing ActivityAnd here is a graph is of the number of states with one month increasing activity according to the Philly Fed. 

This graph includes states with minor increases (the Philly Fed lists as unchanged).

In April all 50 states had increasing activity including minor increases.

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Finding Shelter in an Inverse ETF

As the old saying goes, “What goes up must come down.” Indeed, up until the recent selling wave caused by Russia’s war against Ukraine and the continued…



As the old saying goes, “What goes up must come down.”

Indeed, up until the recent selling wave caused by Russia’s war against Ukraine and the continued effects of supply chain disruptions amid the COVID-19 pandemic, tech stocks, including semiconductors, were the darlings of the investment world. That is, it seemed as if the sky-high valuations of some tech stocks were sustainable in an atmosphere of seemingly perpetual growth.

That, of course, was not the case, and the too-good-to-be-true valuations were quickly brought down to earth by the forces of inflation and tight monetary policy. As a result, the tech-heavy Nasdaq entered a free-fall that has not yet found a bottom.

At the same time, that does not mean that we should abandon the sector as a lost cause. One such way to play the sector during its downhill slide is the exchange-traded fund (ETF) Direxion Daily Semiconductor Bear 3X Shares (NYSEARCA: SOXS).

As its title suggests, this is an inverse ETF, meaning that it is built to go up in value when its parent index goes down. Specifically, SOXS provides three times leveraged inverse exposure to a modified market-cap-weighted index of semiconductor companies that trade in American markets by using swap agreements, futures contracts and short positions.

While the index’s holdings are weighted by market capitalization, the fund’s managers cap the weights of the top five securities in the portfolio at 8% each. The weight of the remaining securities is capped at 4% each.

As of May 24, SOXS has been up 0.37% over the past month and up 24.73% for the past three months. It is currently up 60.47% year to date.

Chart courtesy of

The fund has amassed $258.15 million in assets under management and has an expense ratio of 1.01%.

In short, while SOXS does provide an investor with a way to invest in an inverse ETF, this kind of ETF may not be appropriate for all portfolios. Thus, interested investors always should conduct their due diligence and decide whether the fund is suitable for their investing goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

The post Finding Shelter in an Inverse ETF appeared first on Stock Investor.

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