“Politics is a pendulum whose swings between anarchy and tyranny are fueled by perpetually rejuvenated illusions.” -Albert Einstein
"Those who are too smart to engage in politics are punished by being governed by those who are dumber.” -Plato
"I have no ambition to govern men; it is a painful and thankless office." -Thomas Jefferson
“Politics is the art of looking for trouble, finding it whether it exists or not, diagnosing it incorrectly, and applying the wrong remedy.” -Earnest Benn
Debating politics gets you no where but frustrated. We proved this yesterday....
U.S. equities rallied into the close yesterday. This momentum extended into the overnight session all the way into this morning. A WAY BETTER THAN EXPECTED April New Home Sales print just added some steam to the stock side rally....
Sales of new one-family houses in April 2010 were at a seasonally adjusted annual rate of 504,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 14.8 percent above the revised March rate of 439,000 and is 47.8 percent above the April 2009 estimate of 341,000.
The median sales price of new houses sold in April 2010 was $198,400; the average sales price was $249,500. The seasonally adjusted estimate of new houses for sale at the end of April was 211,000. This represents a supply of 5.0 months at the current sales rate.
- APRIL SINGLE-FAMILY HOME SALES 504,000 UNIT ANN. RATE (CONS 430,000) VS MARCH 439,000 (PREV 411,000)
- APRIL SINGLE-FAMILY HOME SALES +14.8 PCT VS MARCH +29.9 PCT (PREV +26.9 PCT)
- APRIL HOME SALES NORTHEAST UNCH, MIDWEST +31.6 PCT, SOUTH +10.8 PCT, WEST +21.7 PCT
- APRIL NEW HOME SUPPLY 5.0 MONTHS' WORTH AT CURRENT PACE, LOWEST SINCE DEC 2005, VS MARCH 6.2 MONTHS
- APRIL MEDIAN SALE PRICE $198,400, -9.5 PCT FROM APRIL 2009 ($219,200)
- HOMES FOR SALE AT END OF APRIL 211,000 UNITS, LOWEST SINCE OCT 1968, VS MARCH 227,000 UNITS
- SINGLE-FAMILY HOME SALES LEVEL HIGHEST SINCE MAY 2008
Of course this data reports on contracts signed in April---before the tax credit expired--- so the market will likely discount this release in anticipation of a pullback in May. Nonetheless stocks have extended their overnight rally and benchmark interest rates are higher.
The S&P is up 1.27% at 1087. The 10 yr TSY note yield is +8bps at 3.238%...and rate sheet influential MBS prices are lower.
The FN 4.0 is -0-05 at 99-18. The FN 4.5 is -0-05 at 102-06. The secondary market current coupon yield is 2.4bps higher at 4.066%. Yield spreads are tighter vs. benchmarks but off their tights of the session.
The stock lever is behind rising interest rates today. If this is to continue stocks will need to press higher. Here are some key pivots points for the S&P...
Mortgage rates will be worse today..