September new home sales dropped an astonishing 5.6% from the month before and now shows negative growth on a year-over-year basis for the first time since 2011. If mortgage rates at 4.1% are now a headwind for home sales you have to wonder what would happen to housing if rates “normalized” at 5-6%?
It appears the equity markets might be able to continue higher (S&P hit new high same day as bad housing data) as long as home prices are flat or down, no one can find a job, and GDP is falling as these things keep the Fed’s lead foot firmly on the accelerator.
Our Report this month is aptly titled: “Caution to the Wind”.
Hope you find the report insightful and helpful in gaining understanding of what are the primary drivers of the markets.
Please see report by selecting this link: http://www.peakcapitalmgt.net/files/November%202013%20PCM%20Report.pdf