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VIDEOBeige Book Shows Housing-Led Economic Slowdown
By
Richard Suttmeier
Sep 09, 2010 8:50 am
So far there have been no government programs to help the root cause of the problems.
Editor's Note: This article was written by Richard Suttmeier, chief market strategist at ValuEngine.com, which is a fundamentally-based quant research firm in Princeton, New Jersey, that covers more than 5,000 stocks every day.
10-Year Note -- (2.661) Daily and annual value levels are 2.725, 2.813, and 2.999 with monthly, weekly, quarterly, and semiannual risky levels at 2.562, 2.507, 2.495, and 2.249. (CBOE Interest Rate 10-Year T-Note (^TNX) last traded at 2.68.)
Comex Gold -- ($1256.7) Weekly, semiannual, quarterly, and annual value levels are $1223.7, $1218.7, $1140.9, and $1115.2 with a daily pivot at $1260.1, and semiannual and monthly risky levels at $1257.5, $1260.8, and $1263.8. Note that gold is still overbought on its daily chart.
Nymex Crude Oil -- ($74.57) Quarterly value level is $56.63 with my monthly pivot is $74.45, and daily, weekly, annual, and semiannual risky levels at $75.04, $76.76, $77.05, and $83.94.
The Euro -- (1.2714) Quarterly and monthly value levels are 1.2167, 1.1721, and 1.1424 with daily, weekly, and semiannual risky levels at 1.2771, 1.3168, and 1.4733. (CurrencyShares Euro Trust (FXE) last traded at 126.68.)
Daily Dow -- (10,387) Monthly and quarterly value levels are 10,164 and 7,812 with my annual pivot at 10,379, and weekly, daily, semiannual, and annual risky levels at 10,515, 10,531, 10,558, and 11,235. My annual risky level at 11,235 was tested at the April 26 high of 11,258.01. The 50-day simple moving average is 10,275 with the 21-day at 10,260, and 200-day simple moving average as resistance at 10,451, which was tested on Friday. Longer term its still “Dow 8500 before 11,500."
The Fed Beige Book -- Gossip From the 12 Fed Districts
The Beige Book suggested continued economic growth from mid-July to the end of August, but with widespread signs of deceleration. Home sales slowed further following the severe drop after the expiration of the tax credits for homebuyers. Construction activity experienced a slowdown and demand for commercial real estate remained weak with downward pressure on rent rates. Bank lending remained soft as businesses remained reluctant to implement expansion plans.
My Analysis
“The Great Credit Crunch” began on Main Street, USA, with the housing bubble and community banks becoming overexposed to commercial real estate loans, especially construction & development loans. So far there have been no government programs to help the root cause of the problems.
Monthly Survey of Real Estate Agents -- from Credit Suisse -- shows additional pressures on home prices in August with the expectation that this trend will continue into 2011. It appears prices must come down with an inventory of close to 4 million existing homes up for sale. This report supports my prediction that home prices will decline 30% by the end of 2014.
Trade ETFs? Take a 14-Day Free Trial to Mike Paulenoff's MPTrader newsletter. Receive specific trades and strategies across all sectors. Learn more.
10-Year Note -- (2.661) Daily and annual value levels are 2.725, 2.813, and 2.999 with monthly, weekly, quarterly, and semiannual risky levels at 2.562, 2.507, 2.495, and 2.249. (CBOE Interest Rate 10-Year T-Note (^TNX) last traded at 2.68.)
Comex Gold -- ($1256.7) Weekly, semiannual, quarterly, and annual value levels are $1223.7, $1218.7, $1140.9, and $1115.2 with a daily pivot at $1260.1, and semiannual and monthly risky levels at $1257.5, $1260.8, and $1263.8. Note that gold is still overbought on its daily chart.
Nymex Crude Oil -- ($74.57) Quarterly value level is $56.63 with my monthly pivot is $74.45, and daily, weekly, annual, and semiannual risky levels at $75.04, $76.76, $77.05, and $83.94.
The Euro -- (1.2714) Quarterly and monthly value levels are 1.2167, 1.1721, and 1.1424 with daily, weekly, and semiannual risky levels at 1.2771, 1.3168, and 1.4733. (CurrencyShares Euro Trust (FXE) last traded at 126.68.)
Daily Dow -- (10,387) Monthly and quarterly value levels are 10,164 and 7,812 with my annual pivot at 10,379, and weekly, daily, semiannual, and annual risky levels at 10,515, 10,531, 10,558, and 11,235. My annual risky level at 11,235 was tested at the April 26 high of 11,258.01. The 50-day simple moving average is 10,275 with the 21-day at 10,260, and 200-day simple moving average as resistance at 10,451, which was tested on Friday. Longer term its still “Dow 8500 before 11,500."
The Fed Beige Book -- Gossip From the 12 Fed Districts
The Beige Book suggested continued economic growth from mid-July to the end of August, but with widespread signs of deceleration. Home sales slowed further following the severe drop after the expiration of the tax credits for homebuyers. Construction activity experienced a slowdown and demand for commercial real estate remained weak with downward pressure on rent rates. Bank lending remained soft as businesses remained reluctant to implement expansion plans.
My Analysis
“The Great Credit Crunch” began on Main Street, USA, with the housing bubble and community banks becoming overexposed to commercial real estate loans, especially construction & development loans. So far there have been no government programs to help the root cause of the problems.Monthly Survey of Real Estate Agents -- from Credit Suisse -- shows additional pressures on home prices in August with the expectation that this trend will continue into 2011. It appears prices must come down with an inventory of close to 4 million existing homes up for sale. This report supports my prediction that home prices will decline 30% by the end of 2014.
Trade ETFs? Take a 14-Day Free Trial to Mike Paulenoff's MPTrader newsletter. Receive specific trades and strategies across all sectors. Learn more.
No positions in stocks mentioned.
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