Home Sales Still Soaring, Raised Earning Guidance Buoys Markets, and Supply Chain Problems Continue to Affect Commodities

Home sales hit a multi-year high in June but are still below expectations as inventories remain extremely low for this time of year. Will the Case-Shiller Home Price Index exceed 25% and will prices keep climbing? Bond yields are once again declining with a flattening yield curve as European bond yields move back into negative territory while increased earnings guidance has helped support equity markets. Turning to commodities, Gold and the USD are both doing well—a rare occurrence—as we wait to see which way copper will break out of its narrowing channel. Agricultural commodities’ prices are soaring as well with coffee futures up in response to the frost in Brazil. Outside the U.S., many countries that fared a little better during the initial pandemic lockdowns are now feeling the effects, only further complicating global supply chains and the expected recovery.

1. As home sales continue to surge, the median price hit an all-time high:

Source: The Daily Shot, from 7/23/21

2. And if Zillow’s data holds, the prices will climb much higher still:

Source: The Daily Shot, from 7/23/21

3. Recent Fed bond purchases have been supporting the yield retreat:

Source: The Daily Shot, from 7/23/21

4. The ECB meeting was more Dovish and maintained QE accommodation well into the future. European bond yields have moved back into negative territory:

Source: The Daily Shot, from 7/23/21

5. Earnings continue to support the markets:

Source: The Daily Shot, from 7/23/21

6. A rather unusual occurrence, gold and the USD are both doing well:

Source: Longview Economics, from 7/23/21

7. Copper has to break out one way or the other:

Source: The Daily Shot, from 7/23/21

8. It is unlikely your favorite coffee shop lowered prices over the past few years, but I’m sure they are passing through the price increases due to the Brazilian frost:

Source: The Daily Shot, from 7/23/21

9. “Has anyone seen Beaks?”–Eddie Murphy

Source: The Daily Shot, from 7/23/21

10. Worldwide vehicles sales are currently about 70 million/year. This is why the U.A.E. forced a higher output; they want to sell their oil “while it still has value”:

Source: U.S. Department of Energy, from 7/22/21

11. Many Asian economies were largely spared during the earlier waves of Covid. Now it is their “turn”, which will further complicate the global supply chain recovery:

Source: Taiwan News, from 7/23/21

12. Wildfire smoke in North America:

Source: The Earth Observatory, from 7/23/21