The Boock Report

It's certainly amazing that the S&P 500 has regained its pre pandemic level with it assuming that 2019 earnings will be quickly reattained in 2021, and also helped by lower interest rates that has resulted in the rationalization that it's ok to pay a higher P/E multiple even though rates are low because growth is slower. What is also astonishing is the market cap …

[Read more...] about A few things

July housing starts totaled 1.496mm which was well above the estimate of 1.245mm and up from 1.22mm in June (revised up slightly from 1.186mm). A big piece of the upside was in the multi family sector as starts here spiked by 205k to 556k, the highest since January when it printed 628k and vs 533k in February. Single family starts were still higher but by 71k to 940k. …

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Outside of Home Depot's incredible earnings report, I think the other most important commentary to listen to in the conference call at 9am est is what they say about business in August without the additional government transfer payments and whether the momentum continued as more of the economy reopened. Randy Forsyth in the weekend Barron's quoted numbers from …

[Read more...] about What does an extra $1.386 Trillion get you?

The one caveat I forgot to mention on my comments on home builder sentiment has been the surge in the cost of lumber which also gets to my belief on coming higher inflation. The Chairman of the NAHB said “The V-shaped recovery for housing has produced a staggering increase for lumber prices, which have more than doubled since mid April. Such cost increases could …

[Read more...] about Lumber prices

Released before the scheduled 10am time frame, the August NAHB home builder index rose to 78 from 72 and that was 4 pts above expectations. This diffusion index measuring the direction of the mood, rather than the extent, matches the highest level on record dating back to the 1990’s. It was 1998 the last time it was here. All three components were higher. Present …

[Read more...] about Housing and Mfr’g

At least as measured by the Citi Panic/Euphoria index, bullish sentiment continues to get even more extreme. I don't believe the euphoria has ever been this high in this index and is now more than double the .41 line in the sand where euphoria is entered. It won't matter until it does but this is hard to ignore.  The key US data points this week will be the …

[Read more...] about Another sentiment gauge/Some data

Industrial production in July was as expected, rising by 3% m/o/m with a modest 3 tenths upward revision to June to a 5.7% increase. All related to the reopenings and increased economic activity as the byproduct of that. The manufacturing component in particular was up by 3.4% m/o/m vs the estimate of 3% and June was revised up by two tenths to a gain of 7.4%. The …

[Read more...] about July IP and Aug consumer confidence

July core retail sales rose 1.4% m/o/m, above the estimate of up .8% and June was revised up by 4 tenths to a gain of 6%. This follows a 10.4% increase in May after the 12.4% drop in April as things were about fully shut. As things continued to reopen and consumers headed outside again, most categories saw m/o/m gains except building materials, autos/parts and …

[Read more...] about Retail sale in July, but what happens now?