The US dollar continued to move lower during the US trading session after NAHD Sentiment reading came in much worse than the market had been expecting.
Friday’s trades basically continued, after the NAHB headline hit 55, which was well below the 65-reading expected and the prior months headline reading of 67.
Inside the report it showed that Sentiment towards Current single-Family sales hit 64 instead of 77, and Sentiment towards sales over the next six months tanked to 50 against the prior 61 reading.
The Index of Prospective Buyers remained exceptionally low, at 37. This was down from the prior reading of 48. This basically highlighted the ongoing pessimism towards the new buyers.
In reality, there has been plenty of talk from home builders about a sudden stop in demand and interest. This is because prices have risen much faster than US wages.
I suspect this latest housing sentiment reading could be the final nail in the coffin in terms of the 75 basis points Versus the 100 basis points debate amongst market participants.
Additionally, Federal Reserve Governor Waller, who is a voting member of the Federal Reserve specifically mentioned United States housing as something he’s watching, and this is a strong signal.
Housing is an evolving sector to watch. It is very important due to the credit factor involved and also what the US consumer has left in terms of spending power.
US housing starts are releases tomorrow, this will be a big deal for sentiment, and also existing home sales are released on Wednesday. Please bare in mine those are lagging indicators while today’s reading is leading.
In terms of the market reaction US stocks are rising for the third day with the Nasdaq making great strides above the 12,000 level. European markets are also doing well.
Cryptos have been a big gainer from the turnaround in sentiment and we are already seeing Bitcoin moving back towards its trend defining 200-week moving average.