Latest Home Price Index Reading, Where The U.S. International Trade Balance Stands, & What Is Going On With Egg Prices? | (12.27.22)
“One day or day one. You decide.” - Unknown
What You Need To Know Today:
• The Federal Housing Finance Agency (“FHFA”) published the latest reading of the S&P/Core Logic Case-Shiller Home Price Index this morning which came in at 0.0% (no change MoM) — above the market expectation of (-0.9%) and slightly below last month’s reading of 0.1%.1 On a year-over-year basis, the Home Price Index came in at 8.6% — above the pre-release market expectation of 8.0%, but below last year’s reading at this time of 10.4%. As a refresher, the Case-Shiller Home Price Index measures the changes in home prices across 20 major U.S. metropolitan areas and is one of the leading indicators for the health of the residential real estate market. Lastly, it’s important to note that this index only measures home with mortgages backed by Fannie Mae and Freddie Mac.
TL;DR — Home prices remained “flat” showing market resilience month-over-month. On a year-over-year basis, home prices went up by 0.6% (more than the market expected but lagged last year by 1.8%).
• According to the U.S. Census Bureau the U.S. international trade balance over the past month came in at (-83.3B) — closer to neutral than the pre-report market expectation of (-96.2B) and above last month’s reading of (-98.8B).2 This figure measures the difference in value between goods imported to the U.S. and those exported from the U.S. to other countries. More specifically, the balance is calculated by taking the exported goods and subtracting the imported goods — meaning that a negative reading (like we are seeing) indicates more imports than exports. In general, increased export demand is good for a nation’s economy/currency because foreigners must buy the domestic currency in order to pay for that nation’s exports.
TL;DR — A larger proportion of exports pushed the U.S. trade balance closer to neutral last month. This is positive for USD strength.
Chart Of The Day:
Egg prices in the U.S. have hit record highs due to an outbreak of bird flu that has killed millions of chickens across almost all 50 states. Wholesale prices of Midwest large eggs reached a record $5.36/dozen in December, leading to retail egg prices that have increased more than any other supermarket item this year. More specifically, this price growth has been by more than 30% from January to early December (compared to the same period in 2021). The outbreak has led to the death of approximately 58 million birds, the worst in U.S. history.
USDA U.S. Southeast Large Eggs Wholesale Price (Cents/Dozen)3
TL;DR — Egg prices have increased by more than any other supermarket item in 2022 — driven by both inflation and the worst bird flu outbreak the U.S. has ever seen.
Poll Of The Day:
Source: Federal Housing Finance Agency (“FHFA”) - S&P/Core Logic Case-Shiller Home Price Index. U.S. metropolitan regions measured include Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa, and Washington D.C.
Source: U.S. Census Bureau - International Trade Goods Balance.
Source: The Daily Shot.