Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Housing, Chemicals And Economic Activity

Published 08/24/2016, 01:45 AM
Updated 07/09/2023, 06:31 AM

Economic activity is a composite of its parts and single measures of activity cannot be used in isolation from others. Monthly Supply of New Homes looks good but is not, while Chemical Activity Barometer which is a good overall indicator reaches record highs. Economic activity is not uniform and it is important to invest selectively.

Monthly Supply of New Homes for Sale look very good by themselves, but the pace of the housing market remains at 1991 recession levels. Monthly Supply New Homes for Sale at 4.3mos-also seeing price decline (which I predicted couple of years ago) as smaller new homes enters the mix. Credit remains tight and the pace of sales remains well below what is needed in my opinion to get excited about bank mtg lending and homebuilders themselves.

Normally I would be all in a selection of housing related issues. But, govt regulation, heavy fines and threats to even tighter regulation forced me to change my positive stance in 2015. I continue avoid banks and housing till I can get a better sense that credit spreads are widening and that we are likely to see some improvement in the current very slow pace for housing.

The Monthly Supply looks very good, but everything else indicates the pace is likely to remain slow and earnings are likely to be below previous levels.

Residential Construction Employment

The Chemical Activity Barometer (CAB) hit an all time high of 114.4. This is an overall economic indicator considering this index’s composition and that chemicals are produced for and used in every aspect of human activity. Seeing this indicator hit new highs, provides support for higher equity prices as well as higher fixed income yields.

Chemical Activity Barometer CAB Vs SP500

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.