Weekly Economic & Financial Commentary: Housing Looking Up as Dark Trade Clouds Gather

Weekly Economic & Financial Commentary

U.S. Review

Housing Looking Up as Dark Trade Clouds Gather 

• Durable goods orders slipped 2.1% during April. The grounding of the 737 MAX led to a 25.1% drop in commercial aircraft orders. However, core capex orders also fell 0.9%, a signal that business investment should continue to be subdued.
• Home sales stumbled during April. Existing sales fell 0.4% and new sales dropped 6.9%, though the monthly weakness masks a more positive trend driven by lower mortgage rates.
• Minutes for the early May FOMC meeting appear to confirm our view that the Fed is not likely to raise interest rates this year.

Global Review

Global Economy Pauses, But Will It Refresh?

• Data out of foreign economies during the past week have been mixed, with no clear evidence that international growth was either speeding up or slowing down in early 2019.
• Japan’s Q1 GDP was firmer than expected, though mainly due to soft imports rather than strong domestic demand. March machinery orders were firmer than forecast, while exports weresofter than forecast.
• After the U.K economy showed resilience in Q1, confidence surveys suggest a possible slowing in Q2. Meanwhile Eurozone PMIs eased in May, and it seems likely that Eurozone Q2 GDP growth might fall short of its Q1 pace

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