Mixed Housing Data for June

Housing Starts and Building Permits for June — metrics that are essential for tracking overall domestic economic growth — came in mixed this morning. The headline read for new Housing Starts reached 1.253 million seasonally adjusted, annualized units, higher than the 1.244 million expected. This offsets the slightly downwardly revised 1.265 million units from the previous month.

Building Permits, a forward indicator for future starts, reached just 1.22 million last month — well below the 1.3 million analysts were looking for. Revisions for May were slightly higher, to 1.299 million. This marks a drop of 6.1% in permits for June, compared with the -0.3% expected.

Looking beneath the headlines, new housing for multi-family units was the drag on these monthly results; single-family homebuilding actually rose 3.5%. On the permits side, multi-family units also came in light of expectations, while single-family showed slight growth sequentially.

Considering current low interest rates — with a possible Fed rate cut coming at the end of the month — these flaccid numbers are somewhat unexpected. Unless homebuyers are waiting for another leg down on mortgage rates once the rate cut takes effect, we may be seeing some demand concerns in the housing sector.

Q2 Earnings, Continued

Following a string of big Wall Street banks reporting earnings already this week, Bank of America BAC beat estimates by 4 cents per share to 74 cents in its Q2 earnings report, above the 63 cents reported in the year-ago quarter. Revenues of $23.08 billion beat expectations by 50 basis points, and are up from $22.61 billion in Q2 2018. Shares are down slightly in today’s pre-market.

U.S. Bancorp USB also put up slight beats on its Q2 earnings and revenues: $1.09 per share versus $1.07 expected, and $5.8 billion versus $5.7 billion anticipated, respectively. Average earnings assets rose 3.5% in the company’s Q2.

Abbott Labs ABT was slightly mixed in its Q2 earnings report: 82 cents per share topped by two cents while revenues of $7.98 billion came in 10 basis points shy of the Zacks consensus. Shares are up 1 2/3% a half hour before the opening bell.

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