U.S. automobile and real estate sales decline despite higher consumer confidence and low unemployment as of October 2018.

Fiona Sydney

2018-10-27 09:34:00 Sat ET

U.S. automobile and real estate sales decline despite higher consumer confidence and low unemployment as of October 2018. This slowdown arises from the current U.S. interest rate hike that helps wean the economy off near-zero rates. High costs of capital squeeze the automobile and real estate industries after the prior decade of monetary stimulus. The most expensive U.S. consumer purchases are cars and houses, and these consumer industries are quite sensitive to the cyclical ebbs and flows of credit supply expansion. Recent U.S. mortgage rates reach 5% for the first time since 2011, and thus new home sales tumble 5.5% in 2018Q3 to the lowest level in about 2 years.

Residential home sale declines are double-digits and quite severe in the northeast and west U.S. states. In light of higher mortgage rates and home prices, financial economists start to consider rental properties more cost-effective than residential home purchases. Meanwhile, most Case-Shiller home price indices begin to show the current trend that home price gains decelerate from March 2018 to September 2018. Wall Street seems to impose hefty penalties on automobile and real estate stocks. Many homebuilder ETFs such as XHB, TOL, and KBH have plunged about 30% year-to-date since January 2018. Also, several automobile stocks from Ford to GM show 25%+ price declines in the same time frame. The latter auto industry further suffers higher production costs due to Trump tariffs. These bearish traces suggest the inconvenient truth that the U.S. economy may have gone beyond the peak of real business cycles with low inflation and robust employment and capital investment growth.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Ivanka Trump and Treasury Secretary Steven Mnuchin press the case for GOP tax legislation.

Jonah Whanau

2017-10-15 07:38:00 Sunday ET

Ivanka Trump and Treasury Secretary Steven Mnuchin press the case for GOP tax legislation.

Ivanka Trump and Treasury Secretary Steven Mnuchin both press the case for GOP tax legislation as economic relief for the middle-class without substantial t

+See More

The global pandemic crisis helps reshape international finance, trade, and technology.

James Campbell

2021-02-01 10:19:00 Monday ET

The global pandemic crisis helps reshape international finance, trade, and technology.

In recent times, the International Monetary Fund (IMF) predicts that the fiscal-debt-to-GDP ratio of most rich economies would rise from 95% in 2018 to 135%

+See More

We need crowdfunds to support our next responsive web design and iOS and Android app development.

Andy Yeh Alpha

2019-01-13 12:37:00 Sunday ET

We need crowdfunds to support our next responsive web design and iOS and Android app development.

We need crowdfunds to support our next responsive web design and iOS and Android app development. Upon successful campaign completion, we will provide an eb

+See More

Agile business firms beat the odds by building faster institutional reflexes to anticipate plausible economic scenarios.

Fiona Sydney

2020-09-03 10:26:00 Thursday ET

Agile business firms beat the odds by building faster institutional reflexes to anticipate plausible economic scenarios.

Agile business firms beat the odds by building faster institutional reflexes to anticipate plausible economic scenarios. Christopher Worley, Thomas Willi

+See More

The current homeland industrial policy stance worldwide seeks to embed the new notion of global resilience into economic statecraft.

Daisy Harvey

2025-01-31 09:26:00 Friday ET

The current homeland industrial policy stance worldwide seeks to embed the new notion of global resilience into economic statecraft.

The current homeland industrial policy stance worldwide seeks to embed the new notion of global resilience into economic statecraft. In the broader cont

+See More

Apple upstream semiconductor chipmaker TSMC boosts capital expenditures to $15 billion with almost 10% revenue growth by December 2019.

John Fourier

2019-11-11 09:36:00 Monday ET

Apple upstream semiconductor chipmaker TSMC boosts capital expenditures to $15 billion with almost 10% revenue growth by December 2019.

Apple upstream semiconductor chipmaker TSMC boosts capital expenditures to $15 billion with almost 10% revenue growth by December 2019. Due to high global d

+See More