The Housing Market Continues To Slow Down More Rapidly Than The Market Expects & Which Countries Do You Think Are The Most Innovative? (12.21.22)
"We can't help everyone, but everyone can help someone." - Ronald Reagan
What You Need To Know Today:
• The National Association of Realtors (“NAR”) published the latest existing home sales figures for November 2022 —which measure the number of residential homes sold excluding all new construction. If you are specifically interested in new construction and want more information regarding home states and building permits see yesterday’s Homepage. It’s also important to note that although this data measures monthly activity it is reported as an “annualized” figure meaning “monthly x 12.” According to the NAR, existing home sales (annualized) in November were 4.09 million — below the pre-report market expectation of 4.20 million.1 This is now the tenth month in a row with declining existing home sales.
TL;DR — Home sales continue to slow at a faster pace than the market anticipates.
• The Conference Board (CB) released an updated Consumer Confidence Index reading this morning which came in at 108.3 — significantly beating the market forecast of 101.0 and also above last month’s reading of 100.2.2 While this survey of 3,000 households asks respondents to rate the relative level of current/future economic conditions what many market participants really want to know is will we see a “Santa Claus rally?” This would be the seventh in a row:
TL;DR — Market sentiment seems to be all over the place. One report has it significantly “worse” than market expectations and the next has it significantly “more optimistic” than the market is expecting.
• Last but not least, the Energy Information Administration (“EIA”) reported the latest crude oil inventory figures this morning which declined by (-5.9) million — notably below the market expectation of 2.5 million and the last reading of 10.2 million.3 This report measures the change in the number of barrels of crude oil held in inventory by commercial firms giving us a look into the supply and demand dynamics of oil. An imbalance in one direction or the other can lead to changes in production levels and ultimately price volatility for consumers (us at the pump). In this case, a considerable supply in oil (with consistent demand) means we can expect to see gas prices move upwards.
TL;DR — Crude oil inventories came in lower than expected indicating either weakened supply or greater demand than anticipated. Either way, it indicates increased oil prices.
Chart Of The Day:
The UN's World Intellectual Property Organization (WIPO) publishes annual rankings for countries on the innovation of their economies through the Global Innovation Index. The Index evaluates countries based on various factors including research and development spending, patent systems and output, local labor capital, and general market strength. Over the past 12 years, Switzerland has consistently remained in the #1 spot due to its strong Intellectual Property laws and local economic strength. The top 10 rankings have also included Sweden, Singapore, and the United States since its inception, while countries including Canada and Ireland have dropped out of the top 10 and been replaced by South Korea and Germany.
The World’s Most Innovative Countries Over The Last 12 Years4
TL;DR — Switzerland has consistently been the most innovative country over the last 12 years.
Source: National Association of Realtors (“NAR”) — Existing-Home Sales Report.
Source: The Conference Board (“CB”) Inc. — Consumer Confidence Index.
Source: Energy Information Administration (“EIA”) — Summary of Weekly Petroleum Data
Source: Visual Capitalist