Yesterday we had new home sales numbers released that blew the forecasts out of the water–763,000 versus 675,000 forecast–wow!! Strong employment is driving housing and new house sales are up because folks in a house with a 3% mortgage don’t list their houses for sale–buy new or go home. At the same time as sales shot higher Case-Shiller showed prices down 1.7%–that is a 20 city average–I question this because anecdotally prices are moving higher (albeit at a slow rate) in much of the midwest.
Durable goods orders moved higher by 1.7% versus a forecast of -.9%. Data is building for a Fed funds rate hike in July–it is way to early to say for sure, but the Fed is looking for ‘cover’ to be able to justify their ‘data dependent’ rate hike.
Today we have just minor economic new on the calendar – but Powell is speaking (and we know what his line is).
Many of you already know that Brookfield Reinsurance has made an offer to buy American Equity Life (AEL) which has 2 preferred issues outstanding. Preferreds of company’s that are bought by any of the Brookfield divisions tend to fall sharply–but the AEL shares did not fall yesterday. It is a misplaced belief that Brookfield suspends preferred dividends – they make each company carry their own weight and the parent company does not ‘bail out’ various divisions that can’t earn their dividend. Let’s hope sane heads prevail with the preferred shares.