I shall call this "The U.S Housing Week"
International Trading
THE TECHNIQUE OF GIVING A GOOD MASSAGE
14 years ago
Saturday, September 25, 2010
, Posted by Usman Ali Minhas at 10:53 AM
The U.S economy just ended a very important week where many insightful data were released, which led to high volatility is the capital markets as sentiments were mixed between concerns regarding the U.S dollar value on one hand along with recovery concerns, and on the other hand remarkable housing sector data as for August along with impressive kickoff for earnings season.
The week's highlight was on the Housing sector, as the sector's performance during August was under measurement, which included Housing Starts, Building Permits, Existing Home Sales and New Home Sales which they all came in better than expected which will definitely boost growth in the second quarter because of the huge multiplier nature the housing sector is characterized with.
In detail we see the Housing starts climbed during August from prior reading of 546 thousand to reach 598 thousand, which is higher than the expected 550 thousand starts, Yet on monthly basis housing starts index climbed by 10.5% continuing the prior climb of 1.7%, the figure came in higher than the expected 0.7% climb. As for Building Permits during August, it climbed from prior reading of 565 thousand to reach 569 thousand, which is higher than the expected 560 thousand permits. Yet on monthly basis building permits index climbed by 1.8% reversing the prior fall of 3.1%, the figure came in higher than the expected 0.2% climb.
Further More Existing Home Sales figure regarding the month of August where it climbed by 7.6% reaching 4.13 Million reversing the revised prior reading of 3.84 Million or 27.0% fall, while the actual figure of August came in better than the expected climb worth 4.10 Million or 7.1% climb. As for New Home Sales figures during the month of August; it remained unchanged from the prior revised reading of July worth 288 thousand. The figure disappoints investors as markets expected a 6.9% climb to reach 295 thousand reversing the prior slump of 7.7%.
The U.S economy released furthermore its Durable Goods Orders index for the month of August where it fell by 1.3% which is even deeper than the expected fall of 1%, the index reversed the prior revised climb of 0.7%. Durable Goods Orders Excluding Transportation climbed by 2% which is double the expected climb of 1%, as it reversed the prior revised fall of 2.8%. The fall in Durable Goods orders actually confirm the setback the manufacturing sector has recorded in the recent period as shown in indices that measure the manufacturing level of activity.
On Tuesday the Federal Open Market Committee held its rate decision meeting where it kept its benchmark interest rate unchanged and at historic low range between 0.0% and 0.25% which was already highly expected, knowing that the Feds still strongly believe that low rates will support the economy and help boost growth since the current recovery is still taking place at a slow and gradual pace and stagnated this past period.
In fact, the Committee attested that the overall economic activity has lost momentum and that the labor market unending deterioration is continuing on postponing a full revival from the crisis, having employers still unwilling to add to payrolls view the current overall weak economical conditions while that prices pressures continue on being well subdued and deflation risks eased completely and business spending on high-tech equipment is actually rising.
Noting that the U.S economy also released the Leading Indicators index "which gives three months future outlook regarding economic conditions" regarding the Month of August where it climbed by 0.3% which is better than both expected and prior values of 0.1%.
As for the U.S Dollar it fluctuated heavily through out the week yet when comparing Monday's opening level to Friday's closing level we see that the Dollar Index has weakened versus major currencies. Gold on the other hand surged as a result of the uncertainty this week implied to record a historic high at $1299.55 per ounce. As for U.S capital markets it also witnessed substantial fluctuation but wat limited any loss was corporate America and news released by corporations such as earnings and takeovers.
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