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Why Housing Stocks Could Finally See a Bounce This Week

by | Sep 26, 2022 | Market Outlook, Stocks

In this week’s Wall Street look ahead… last week was a market disaster on a Federal Reserve that is truly unhinged. It seems to view stocks and the housing market as the enemy at this point, and that ain’t good! 

I’m not sure how we’ve gone from inflation being “transitory,” to “there will be PAIN!” But alas, here we are…

So first, let’s look at what’s causing all the pain in the markets right now, and the root of the global unraveling we’re seeing everywhere from stocks to the collapsing British pound…

This chart shows the past 30 days comparing the 2-year U.S. Treasury yield (the white line), which is up nearly a full 1%! And the blue line of course is the S&P 500 futures, down over 10% in the past 30 days…

Treasury chart (Wall Street Look Ahead)

I expect a pullback in the 2-year toward 4%, which should create a corresponding rally in the S&P 500 above 3,800-3,900.

Wall Street Look Ahead: The Economic Numbers That Matter

New Home Sales: 500,000 expected on Sept. 27 — The housing market is also a target of pain for Fed Chair Jerome Powell. We’ve had a massive hike in 30-year mortgage rates, and yet housing prices are stubbornly high as supply is low.

I think we can get an upside surprise to this number, and see crushed housing stocks bounce. We started the year with mortgage rates under 4%… 

A chart of mortgage rates (Wall Street Look Ahead)

PCE Core Deflator, Sept. 30 — As I said last week, inflation numbers will be must-see TV each month. And this week’s Wall Street look ahead, we have one of the Fed’s favorite numbers to view inflation… 

The Personal Consumption Expenditures Price Index, released each month in the Personal Income and Outlays report, reflects changes in the prices of goods and services purchased by consumers in the U.S.

I’d play this one straight up — a high number crushes stocks, and a lower number is a buy.

Check back Friday for a recap of what we saw this week’s Wall Street look ahead!

Jeff Zananiri
Joy of the Trade, WealthPress

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WRITTEN BY<br>Jeff Zananiri

Jeff Zananiri

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