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We have often noted our belief that housing prices were very likely to experience a seasonal bounce in 2009, but that this would ultimately prove to be a head fake within in a much larger downward secular move.  The recent weakness in housing data has some calling the intermediate peak in housing data.  David Rosenberg elaborates:

The National Association of Home Builders’ (NAHB) housing market index dipped to 18 in October from 19 in September — the consensus was looking for an uptick to 20. The real surprise was the forward-looking ‘prospective buyers’ sub-index, which sank three points to a three-month low of 14. We haven’t seen a down-move like that since November 2008. This sub-index has a nice 75% correlation with new home sales and is pointing to a reversal in sales ahead. The decline and lagged performance in the S&P homebuilders index attests to that.


So in the last few weeks, we have seen the ISM, consumer sentiment and the NAHB all peak out and roll over. Could be harbinger for Mr. Market. Then again, the movement in the second derivative only matters when it is one direction.

Source: Gluskin Sheff

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