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Housing was back in focus this week as economists saw renewed signs that the bottom may have finally been touched.But against that strong sentiment was relatively middling jobs data, topped off by the weak Nonfarm Payrolls report on Friday.
And between these two maelstroms, markets had some of their most difficult days since the year began.
Wall Street’s sharpest economists, strategists, and analysts sounded off on these matters this week.
Most offered the same trite analysis we’ve read repeatedly.
But some thought outside the box.
'The study, from January, found that for Harvard alums personally involved in a company relocation decision, 57 per cent said the decision 'involved the possibility of moving existing activities out of the U.S.' Meanwhile, only 9 per cent considered moving existing activities from another country into the U.S. 'A U.S.-based respondent was three times as likely to be considering moving business activity out of the U.S. than a non-U.S. respondent was likely to be considering moving an activity into the U.S,' writes Professor Michael Porter, the study's author.'
Russell is convinced something terrible is on the horizon for the markets. What it is ain't exactly clear -- a European depression? More bad housing news? Whatever it is, it's time to plan for the worst. 'The big money tends to look out six months to a year or so, and there is something 'out there' that they see -- but don't like. Is it a rise in interest rates, is it the power of the Chinese yuan, is it a further collapse in real estate values? Honestly I don' know what it is, but I'm convinced that there is an ominous something out there waiting to materialise. The big money, the institutional money, doesn't want to be in this market when it materialises.' '
'The former Morgan Stanley chief global strategist told Bloomberg's Betty Liu earlier today that the combination of another crisis brewing in Europe and the Fed's apparent retreat from further easing have convinced him that the market is heading for a short-term pullback in the range of 5% to 7%. 'I'd like to have a little less 'risk-on' than before,' he said. 'I'm going to sell the S&P short to hedge the positions I already have. I don't want to net disturb them but I may want too take a little risk off.' '
'When push comes to shove, however, we suspect that central banks may ultimately resort yet again to their printing presses, especially if meaningful economic and financial weaknesses reappear. Remember, this is not about what central banks SHOULD do; rather, it concerns what they are LIKELY to do. And in being forced to inject liquidity into the global system, central banks would be driven not by positive motivations but, rather, negative ones.'
'At long last, however, homebuilder sentiment is turning up, with the index doubling in just the last six months. There have been periodic upticks in this series ever since the bubble burst but nothing of the magnitude now seen in the data. Two of the line items within the survey are just as striking: 'traffic of prospective homebuyers
'What happened yesterday shows that the EURCHF market is wound tight. It could uncoil quickly. I have no doubt that the SNB has resting orders in the capital markets for buying up to 10 billion EURCHF. I also don't doubt their resolve to do more. But nine hours after the mini crash the EURCHF is sitting at 1.2021, a measly 0.17% away from the SNB wall. That's too close for comfort. Something has to give. Another bad day in the Spanish bond market might do it.'
'The old idea was that the official sector would intervene, rebalance the system, and then exit. The old idea was to get the private sector back in the game quickly. The old idea was to recover the official money and then let the market resume its functions of pricing and clearing and providing capital. 'The old idea is dead.' 'The new idea is to crush the private sector and to keep the official sector in the game for a prolonged period.'
'Initial jobless claims, relative to the size of the labour force are now at 0.231%, which is the lowest share since the recession began in late December. In the previous labour market cycle it took a similar amount of time to reach this ratio and in the 1990s recovery it took nearly 6 years, implying that current jobless claims are normalizing in a range of 350,000. When the ratio has been much lower than it is now, firms have been hoarding labour during times of low unemployment. At this stage of the cycle, a decline in claims becomes a less useful signal of labour market strength as a pick-up in hiring, as opposed to a drop in layoffs, takes on greater importance.'
MICHELLE MEYER: This Often Overlooked Indicator Is Sending A Bullish Signal For The Housing Market And The Economy
'One of the areas where you're seeing some improvement is renovation spending,' said Meyer. 'That's the often overlooked sector of the construction market because historically it's a smaller share of construction and it tends to be a lot more steady.' 'It doesn't usually exhibit the same type of cyclical patterns as new construction. But given the unique nature of this cycle, renovation spending is a bigger share of residential investment than new construction now. And we're starting to see some real good signs of improvement in the renovations market.'