March 19 Financial News: Declining Home Sales Expected, 5 Cities People Fleeing, 50 Basis Point

uber one rental at a time it is of

course

your daily financial news

uh what i got for you today first and

foremost remember 8 a.m pacific or in

about 30 minutes

we will be going live for one hours of q

a

typically we talk real estate economy

the fed things of that nature

come join come have a party i will do my

best to recognize everyone that joins

say quick hello i’m still at the level

where i generally can do that so come on

by 8 a.m pacific we go for 60 minutes

and then if you are one of my students

don’t forget that at nine o’clock we

will be going live in our little private

facebook group where we can have a more

intimate discussion so um look forward

to all of that so

uh when i look at the financial news of

the morning a couple of things come to

mind uh let’s talk about the week ahead

something i always try to do saturday or

sunday is give you some color on what is

what is going on

uh monday uh we get earnings from nike

nike’s going to be interesting

for a couple of reasons first and

foremost remember nike was the

validation

90 days ago that the chinese consumer

was backing off remember we got our

first signal from starbucks

and then nike validated so again we’re

going to be looking to see

nike’s earnings if they once again

highlight weakness

weakness in

china which again i believe the chinese

economy is not nearly as strong

as many think it is

tuesday we have nvidia’s investor date

which is interesting the chip sector has

been getting hit a lot it will be

interesting to see

what they are talking about as far as

backlog and delays and things of that

nature

along with adobe right adobe is one of

those uh cloud-based uh software

solutions that’s had a good run uh we

will see uh what they have to say

wednesday is a big day we get general

mills it’s a food producer how bad is

inflation how bad is shipping how bad is

what do they expect

from the rest of the world right general

mills produces stuff that takes wheat as

an input

and if you haven’t been paying attention

wheat has been skyrocketing so will

general mills

highlight

food inflation will they talk about

hedges they may have had in place to

protect themselves it will be

interesting and then kb homes

kb homes kind of a first time home buyer

builder

what is going on what have they seen

are they seeing

buyers back out see home builders home

this is where you’re going to see some

of the cracks

because what happens

you walk in with your husband wife

boyfriend girlfriend solo whatever it is

you sign on a contract to buy a home

it’s

going to be delivered

three six seven months from now you have

quite a bit of interest rate risk

i wonder how many people are cancelling

contracts

think about it think about it seriously

you may have signed a contract where the

30 year was at three percent it’s at

four and a half now

that’s a different payment

so again it’ll be interesting to see uh

where cracks are in new home builders i

suspect

it’s a little early it will be next

quarter where we see the pain uh but it

will be interesting to see if kb homes

gives us any indication i don’t expect

it

but i wouldn’t be shocked if they say

something thursday big day darden

restaurants garden restaurants kind of

that

middle of the road uh

restaurant tour it’ll be interesting to

see if we’re getting out enjoying

services uh it’ll be interesting to talk

about wages right they’ve talked about

historically having a problem hiring

folks of their raising prices what is

going on there and then friday

the big number of the week every week

there’s a big economic number seemingly

this friday is consumer sentiment

folks the last report on consumer

sentiment was the worst in 11 years

how could this report not be even worse

the consumer is getting smacked

repeatedly it’s like walking into the

ring and getting hit by mike tyson over

and over and over again

on wednesday of this past week i told

you that i thought the consumer cracked

right i got multiple uh communications

from brokers and agents saying buyers

are backing out

higher gas higher food higher housing

price higher interest rate it’s higher

higher higher so it’ll be interesting to

see if consumer sentiment validates that

looking at the average 30-year mortgage

is interesting i did that yesterday

40-year mortgage average

4.16

first time it’s over 4.1 since may of

2019 just last week i think it was 4.03

so still going up

one year ago

just for grins

3.09 percent

i think it was uh redfin might have been

zillow put out an article yesterday

that said if you waited a year to buy

your home

like for like

you are now spending

27

more

to buy your home i hope you did not

listen to all of those crash idiots

uh talking about this and that crash it

the math was never there

the setup was never there

sure the price may be as high or higher

than last time but if you watch my

channel you know it is not price it is

payment

if you took action and you found a good

deal last year you were sitting on

probably

10 to 15 appreciation and most

importantly you have locked in

cheap

money

so hopefully you did that hopefully you

did not listen to the crash folks

looks like new home construction is

something we’re going to have to be

looking at

we have now started the most new home

since 2006.

new home construction went up 22

year on year

in a pretty impressive 6.8

month on month

i want to call

not quite bs

but i want to tie

multiple points together

what is something we’ve been talking

about with builders the last six to nine

months

if you’ve been on my channel you we’ve

been introduced to this concept called

dead days

dead days simply said are days where

there’s no activity going on on a house

being built

in addition we have heard about builders

waiting for supplies so they are

laying foundations

if you lay a foundation

you technically have started the house

even though if you lay the foundation

now and you have no problems no plans to

start building the sticks or the frames

it still counts so i suspect nobody has

done the work

to really realize

we got a bunch of pads we got a bunch of

foundations we have no frames i believe

much of this new home construction is

simply economic reporters not tying

together multiple data points so we

shall see

national association of realtors does

estimate that the u.s is short 5.2

million homes

basically over the last decade

we are short over 5 million homes

yesterday i talked about two fed

presidents calling for half a point rate

increase one was james bullard and i

blanked on the second so i made sure to

write it down today his name is chris

waller

he is saying

these are his words i am quoting

the data screams

50 basis point

uh 50 basis point chris wants to front

load

multiple 50 basis point raises

and he says we need to

just do it

and stop talking about it well no joke

chris where the hell were you two days

ago or three days ago

very disappointing

but it does look like our may

fed meeting which is the next one

i don’t know what the odds are i’ll go

look them up

but it looks like

the fed

is telling wall street 50 basis points

is coming at least that’s what it feels

like as of this morning

again i already talked about waiting one

year cost you 27

think about that

you buy a house last year it cost you a

thousand dollar payment i’m just doing a

thousand dollars because it’s easy math

now you want to buy the same house

you’re spending twelve hundred and

seventy dollars

again i hope you did the work i hope you

hope you got your cheap 30-year money

and you were not swayed by people

talking about crashes people talk about

crashes because it makes them money not

because it makes you money

terrible

uh february housing numbers are out kind

of total statistics

729 000 listings that’s of all types

that is down 27 or no down 25 year on

year

and it’s down 48

from two years ago

pretty crazy

fannie mae is watching this channel

folks it’s pretty crazy fannie mae is

now calling for real estate transactions

to fall this year

i keep telling you we could have

a housing crash but it would be

transactions not price fannie mae now is

estimating 4.1

decline

in transactions

looks like credit cards are going up

again i am nervous about the consumer

credit card uh balance now is

856 billion dollars uh that is now a

record it grew the fastest in the last

quarter in 22 years

that’s i

it bothers me every time somebody talks

about 1.2 trillion dollars in excess

savings

i

nobody gave gave me the data but my

guess is the top 10 percent has most of

that savings and the other 90

of americans are now living on credit

cards it’s not good

mark mobius

another rich white guy

mark mobius is saying the fed in order

to get ahead of inflation will

ultimately have to get the fed funds

rate

fed funds to over seven percent

can you imagine i’m not saying that’s

gonna happen i’m just

in my head when i when i hear

crazy numbers like that i go

oh my god seven percent fed funds that

probably means the two year is

nine percent

30-year money is probably 10 and a half

crazy wow

here’s a question for you that you

probably don’t realize

what year this is this is audience

participation get ready to uh

type a response

what year

what year was the last time

that the fed funds rate was six percent

what year

do you think we have to go all the way

back to the 1980s and paul volcker when

do you think the last time the fed funds

rate was six percent let me know i’m

going to go on to my next topic and i

will come back

the closing topic before we answer the

question of the day is

what cities what five cities are people

leaving and what

five cities are people coming to

so

people are fleeing

san francisco

los angeles new york

seattle

and washington d.c

they are going to

miami

phoenix

tampa

sacramento and las

vegas

kind of makes sense that’s what we’re

seeing in the real estate prices and

appreciation makes a lot of sense

so now

the question of the day what year was

the fed funds rate last at six percent

the answer

2001.

mr greenspan 2001.

yeah it’s uh that surprised me if you

would have asked me before i read that

article

i would not have guessed 2001.

pretty crazy yep all right folks

remember 8 am

we will be

going live and answering your questions

saying hello having a good time take

care of yourself bye bye

you

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