Inflation Impacts (by Bill McColl) - 趙永祥的數位歷程檔

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Inflation Impacts (by Bill McColl)

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2022-08-19 04:53:53, 回應(0), 人氣(295)

Inflation Impacts

By Bill McColl, Newsletter Contributor

U.S. equities are mostly flat as the market weighs the latest earnings reports from retailers, along with data showing unemployment claims dropped and existing home sales sank. The Dow is down slightly, while the S&P 500 and Nasdaq are in the green.

Shares of BJ’s Wholesale Club Holdings (BJ) are soaring after the warehouse retailer reported record quarterly results and increased its full-year guidance (more below). However, Kohl’s (KSS) shares are sinking as the department store operator cut its guidance, blaming inflation. Walgreens Boots Alliance (WBA) is the worst-performing stock in the Dow and S&P 500 after a court ruling that the biggest U.S. pharmacy chain, along with CVS Health (CVS) and Walmart (WMT), must pay millions in damages related to the opioid epidemic. CVS and Walmart shares are lower as well.

Verizon Communications (VZ) shares are falling on an analyst downgrade. After being run up by retail meme stock traders this week, shares of Bed Bath & Beyond (BBBY) are plunging as activist investor Ryan Cohen said he was selling all of his stake in the company.

Oil Above $90 a Barrel

Cisco Systems (CSCO) shares are jumping on the networking equipment maker’s earnings and revenue guidance. Better-than-expected results are lifting shares of electronic test and measurement equipment firm Keysight Technologies (KEYS). Oil futures are back above $90 a barrel as U.S. inventories fell more than expected last week. That’s sending shares of fossil fuel-related firms, including APA Corporation (APA) and Halliburton (HAL), higher.

The yield on the 10-year Treasury note is losing ground. The U.S. dollar is rising against the euro, pound, and yen. Most major cryptocurrencies are trading in a narrow range.

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2/ CHART OF THE DAY

Housing Recession

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The U.S. is in a “housing recession” as sales of existing homes slumped last month to their lowest level in more than two years because of rising mortgage rates.

The National Association of Realtors (NAR) reported existing home sales dropped 5.9% to an annual rate of 4.81 million in July. It was the sixth consecutive month of declines, and the fewest sold since June 2020 when the market slumped during the early days of the COVID-19 pandemic. July’s sales were down 20.2% from 2021.

Prices were also lower, with the median selling price dipping to $403,800 from June’s record high of $418,000. Still, prices were 10.8% higher than a year ago.

Chief Economist Lawrence Yun said we’re witnessing a housing recession in terms of falling sales and home building, although not in prices.

Mortgage Rate Impact

Yun explained the ongoing decline in sales “reflects the impact of the mortgage rate peak of 6% in early June.” He noted, however, with rates now down near 5%, sales may soon stabilize as potential buyers will have more purchasing power.

There were more unsold properties available as well. The number of homes on the market rose 4.8% to 1.31 million units, approximately the same as a year ago. July’s unsold inventory was at a 3.3 month supply, up from 2.9 months in June.