Bill Cara: Economic data weakening in the U.S., Tues., July 25, 2006, 9:10 AM

« Altria smoking for now, Tues., July 25, 2006, 8:05 AM | Main | Removing ATI Technologies from Cara 100, Tues., July 25, 2006, 9:48 AM »

July 25, 2006

Economic data weakening in the U.S., Tues., July 25, 2006, 9:10 AM

At 10:00am this morning there will be two important economic reports released. The new home sales number is likely to fall below that of any month since January 2004 and possibly even back to June 2003.

Also out at 10am will be the Consumer Confidence data for June. It could be the lowest of any month in 2006.

Then on Thursday, the Factory Orders data is released at 8:30am.

But, perhaps the key report will be the U.S. GDP report on Friday at 8:30am. Wall Street consensus is for a 2Q06 gain of +3.2 pct, but I feel we could see a number in the high 2's, and that could shock a few people.

In any event, I think the 3Q06 and 4Q06 U.S. GDP numbers will continue to fall, which will set the backdrop for lowered corporate earnings guidance, and Wall Street ratings, for the next two quarters, and that will disappoint traders who are hoping prices move to new high levels this year.

UPDATE: The Consumer Confidence number actually lifted a bit. The existing home sales dropped as expected.

Posted by Posted by Bill Cara on July 25, 2006 09:10:06 AM | Category: Economics

Discourse

And then there is this:

http://today.reuters.com/investing/FinanceArticle.aspx?type=economicNews&storyID=2006-06-29T174055Z_01_N29185414_RTRIDST_0_ECONOMY-INFLATION-TREND.XML&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=InvArt-C1-ArticlePage2

Bill, do you see stagflation in your crystal ball?

Posted by: number2son at July 25, 2006 9:21 AM [link]

number2son,

LOL

Yes, my major theme is Stagflation.

Posted by: Bill Cara at July 25, 2006 9:58 AM [link]

I think is EXISTING HOLMES SALES isn't it?

Posted by: Bullion at July 25, 2006 10:36 AM [link]

Yes, it is existing sales. New home numbers come out on July 27th.

The number reported by the NAR was 6.62, in line with estimates -- in the past year, only Jan '05 has been lower. Remarkably the home builder stocks rallied on the report, or better, on the statement from NAR chief economist David Lereah claiming their numbers demonstrated that the housing market was "stabilizing".

See http://www.realtor.org/PublicAffairsWeb.nsf/Pages/06JuneEHS

This man and the organization he represents has absolutely no credibility when it comes to accurately reporting the actual condition of the housing market.

Posted by: number2son at July 25, 2006 11:48 AM [link]

Bill-

The REAL news out of that Reuters article is THIS sentence:

"The U.S. Labor Department is tinkering with an experimental price gauge that strips out owner-occupied housing costs to offer an internationally comparable inflation, according to a study released this week."

What a laugh! Just as the housing component (OER)begins to lead to higher figures they want to strip it out! When Owner's Equivalent Rent was leading to LOWER figures they of course left it in! UNBELIEVABLE!

Posted by: MarkM at July 25, 2006 12:25 PM [link]

Yes, MarkM, I think this Administration has taken the notion of Bully Pulpit to a new high level. Bullies they are for removing key capital market data from public view.

But every bully is looking for an unfair advantage. And subsequently the opposition rises up, as they will here, in time.

Posted by: Bill Cara at July 25, 2006 12:47 PM [link]

Market seems to be being pushed up on light
volume trades the last 2 days.

TSX scoots up 300 points on little volume - volume only comes in at resistance.

Dollar up - gold stocks up?

Oil stocks up but oil down?

Transportation index goes up 150 points then back
down 150 points.

Is this just some end of the month game?

Hard to make much sense of any of it.

Posted by: Tradesman at July 25, 2006 12:57 PM [link]