Sales of new homes in the US declined 0.6% to 356,000 from 358,000 in March. Economists polled by Bloomberg expected the figure to see no change from the previous month. Although technically a decline, a sharp upward revision was made to February’s release which puts the sales well above the 337,000 consensus estimate. Ultimately the release came as little surprise as recent data, including Housing Starts and the House Price Index, also came in weaker. Dwelling deeper into the number, the supply of homes on the market declined further to 10.7 months, the third consecutive decline from a peak of 12.5 months in January. The amount of homes for sale has fallen 33.8% year-over-year, while the total homes sold has narrowed its annual loss to 30.6%, well below the 34.0% decline at the onset of the financial crisis in September. Businesses have cut back sharply on new construction and continue to lower excess inventory in the face of falling prices. Demand continues to remain weak as the US suffers its worst recession since the second world war.
Also released this morning, durable goods orders for March came in weaker with a decline of eight-tenths of a percent. The release was better than the bloomberg estimate for a 1.5% fall. Also adding to optimism for investors, the previous month’s figure was revised higher to a 2.1% gain. Other major news of the morning included mixed data from European nations and a slide in the US dollar against the euro. The UK today posted its sharpest GDP decline in more than 30 years, while data from the German IFO showed a rise in business confidence.
Markets in the US are treading higher this morning by more than one percent, largely on the back of earnings reports from Ford, Microsoft, and American Express. The three firms posted results that beat estimates. Investors have been watching closely for earnings in financials and automakers. Ford’s narrower-than-expected loss of $1.8 billion and a large rise in cash reserves eased investor concern. American Express came in better than expected with a profit of $443 million in the first quarter. The firm also added itself to the growing list of companies confident in a turnaround with plans to “repay the government investment of preferred shares and warrants” following the stress test results. Elsewhere in the currency markets, the dollar yen pair has strengthened off the morning lows by more than 600pips following sharp downside for the week.