Camelot Portfolios Talking Points

US Housing Market Hiccups

With the release of the September housing data, housing permits and housing start data show a respective decline. Consensus estimates of housing starts for September were around 1.18 million. This was adjusted for the hurricanes along the Gulf coast (US Census Bureau). The actual rate for housing starts in September was 1.13 million (US Census Bureau). The released data for housing starts was below estimates by 4.7 percent (US Census Bureau), but this is an increase of 6.1 percent increase from last September’s housing starts of 1.06 million.

Comparing housing starts relatively by region, the western United States continues to grow while other regions have peaked. The western US grew 15.7 percent month over month and 24.8 percent year over year (US Census Bureau). The Midwest region decline 20.2 percent month over month and modestly grew 2.7% from last September (US Census Bureau).  

Looking into the starting phase of the building process, building permits declined 4.5 percent month over month and are 4.3 percent below last September (US Census Bureau). Permits by region declined month over month in the South and West, but increased in the Northeast and Midwest regions (US Census Bureau).

Mortgage Applications continue to remain within a bounded range. Deviation from week to week has been between +/- 5 percent for the majority of 2017 (US MBA Mortgage Application). The greatest increase week to week happened in the first week of July with an increase of 15 percent (US MBA Mortgage Application).

Previously owned pending home sales continue to trend in a decreasing fashion. This is likely from the tightening supply as well as significant appreciation in certain geographic regions (US MBA Mortgage Application). Pending home sales fell 2.6 percent year over year in the month of August (Trading Economics). All four geographic regions declined year over year (Trading Economics).

Race for Federal Reserve Chairman is Heating Up

 The President has indicated he has narrowed his candidates for the Federal Reserve Chairman down to 5 candidates. The shortlist includes: Kevin Warsh, John Taylor, Jerome Powell, Gary Cohn, and Janet Yellen (Sheetz). President Trump has been interviewing all of these candidates, and will likely announce a decision sometime in November (Sheetz).

Each candidate has unique personalities that could change Monetary Policy for the foreseeable future. While Janet Yellen will carry on the status quo, Warsh’s and Taylor’s views on monetary policy are likely to be more aggressive in nature (Cox). Jerome Powell will likely steer the Fed in a similar manner as Yellen with a little more advocating deregulation (Cox). Ultimately, the decision of the Federal Reserve decision will likely take a market cycle to play out, but it is interesting to think of the direction the Fed will take in the future.

Compiled by the Camelot Portfolios Investment Committee

Darren Munn, CFA, Chief Investment Officer

Eric Kartman, Research

Drew Steinman, CPA, Trader/Research

Zach Hartenburg, Analyst

Frank Echelmeyer, MBA, CKA®, Advisor Consultant

-for Broker/Dealer and RIA use only-


Cox, Jeff. "CNBC." 2017. CNBC. 2017.

Sheetz, Michael. "Trump likely to name Fed chair by early November." 2017. CNBC. 2017.

Trading Economics. "US Pending Home Sales." 2017. 2017.

US Census Bureau. "Monthly New Residual Construction." 18 October 2017. 2017.

US MBA Mortgage Application. "Trading Economics." 2017. Trading Economics. 2017.

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