New Home Sales in August fell 0.3% from July to a 373,000 annual pace. The median estimate forecasted a rise to 380,000. Nevertheless, this figure held close to a two-year high, projecting further evidence of recovery in the housing market that will help sustain the economic expansion. Record-low borrowing costs continue to attract buyers while a drop in the supply of foreclosed homes is easing downward price pressure.
Equities Level Δ 1d %
S&P 500 1,433 -0.57
DJIA 13,414 -0.33
Nasdaq 3,094 -0.77
EuroStoxx 50 2,499 -2.72
Nikkei 8,907 -2.03
Hang Seng 20,528 -0.83
Stocks fell on negative news out of Spain, which is detailed more below. The S&P 500 fell for a fifth straight day, the longest losing streak since July, and has also erased its gain since the Fed announced QE3.
Radioshack’s CEO James Gooch leaves after 16 months, with Lively named as the interim CEO. Radioshack suspended its dividend in July after an unexpected loss due to slowing consumer spending and increasing dependence on mobile-phone sales. Low-margin iPhone sales cut into profits, and Best Buy’s plan to open smaller stores dedicated to selling mobile phones hurts the company’s outlook even further. Radioshack’s stock has fallen 73% this year. The company’s stock rose 1.6% today.
Credit Level Δ 1d %
iBoxx IG 121.56 0.3%
iBoxx HY 91.74 -0.5%
CDX IG 5yr S19 102.48 2.8%
CDX HY 5yr S18 99.93 -0.2%
Commodities Level Δ 1d %
WTI Crude 89.98 -1.52
Natural Gas 3.22 3.54
Copper 59,200 0.02
Corn 725 -2.55
Gold 1,753 0.01
Crude falls below $90/barrel for the first time in almost eight weeks amid the government reporting lower oil demand and the European crisis causing a reduction in consumption. The Energy department said that US fuel use decreased 1.1% in the four weeks ended 9/21 and inventories remained at the highest level for this time of year since 1990.
FX Level Δ 1d %
EURUSD 1.2872 -0.01
DXY $ Index 79.9 0.38
Rates Yield % Δ 1d bp
U.S. 10yr 1.61 -6
Germany 10yr 1.46 -13
Spain 10yr 6.03 32
Italy 10yr 5.20 11
Spain’s 10 year yield topped 6% on further protests against austerity measures. Concerns that the debt crisis will worsen continues increase. Germany, the Netherlands, and Finland also said yesterday that Spain should bear the cost of problems in their banks, with the European Stability Mechanism only taking limited burden in recapitalizations. The sovereign debt crisis in Europe also prompted investors to seek refuge, causing Treasuries to rise for an eighth day (the longest run of gains in nearly four years).
