Durable goods orders—excluding transportation—grew for the third month in a row in July after significant contraction during the early days of the Covid-19 crisis, indicating a renewed openness from consumers to long-term capital investments. While much of the overall durable goods spike was thanks to new auto sales, the 2.4% ex-transportation bump is largely attributable to strong home sales as the suburban migration continues in an enduring work-from-home era trend.

New home sales surged 13.9% in July to their highest level since 2006 in a pandemic-era trend that could spur more overall economic activity. Meanwhile, despite record performance, S&P 500 Index® dividend yields are sinking. Is it all due to Covid or is it a sign of something more?

The S&P 500® Index closed at a new record high on Friday, boosted by stronger-than-expected manufacturing and housing data. The mega-cap outliers are still running the show though as small- and mid-caps—and even ~60% of S&P 500 companies—post losses.

Some interesting charts today…

The NY Fed’s Manufacturing Index backed up a bit in August after a near perfect v-shaped comeback while recovery in other advanced economies of the world also seems to have plateaued. Large-caps continue to outperform mid- and small-caps although that outperformance can almost entirely be attributed to select subset of companies and sectors.

Q2 earnings expectations as a whole had the largest margin of surprise to the upside in the last decade. This itself was not a huge surprise though after seeing some of the largest downward expectation revisions.

While the U. S. unemployment situation is still dire, we hit a milestone this week: for the first time since mid-March, first-time claims for state unemployment insurance fell below one million. U.S. consumer prices have risen more than projected though as states continue to ease lockdown restrictions, and it has some concerned about inflation…

There’s a lot going on in D.C these days, but an effective response on housing—or a cross-party compromise on the next round of stimulus funding—doesn’t appear to be one of them. Stimulus talks have reached a stalemate as the share of the population unable to meet housing costs soars.

Congress reached an impasse on the next round of stimulus funding last week—particularly the boost to unemployment benefits—just ahead of Friday’s jobs report. Could this back to school season be the start of more trouble for public health and the economy?

The 32.9% annualized hit to U.S. GDP may have cast a shadow over the end of last week, but a comparison to the Eurozone shows that we were relatively successful in blunting the economic damage. Government debt is soaring though and is set to climb higher when Congress comes to an agreement on the next round of stimulus funding…