In his Daily Market Notes report to investors, while commenting on housing starts, Louis Navellier wrote:
Housing Strength
The economic news this week was surprisingly strong. As an example, the Commerce Department announced that housing starts rose 0.3% in March to an annual pace of 1.793 million. Also notable was that building permits rose 0.4% in March to an annual pace of 1.873 million. February’s housing starts were revised up to an annual pace of 1.788 million.
Q1 2022 hedge fund letters, conferences and more
The strength in housing starts was a surprise, since economists were expect housing starts to decelerate 2.4% in March to an annual pace of 1.745 million. So despite the fact that mortgage rates are now at 5%, the housing market remains surprisingly strong.
Bespoke Investment Group pointed out that when the NASDAQ 100 is negative year over year, which has happened on March 14th as well as 11 times since 1987, the average return for the next month, 3 months, 6 months and 12 months is 5.64%, 14.87%, 18.46% and 26.94%, respectively. Although the NASDAQ 100 is up since March 14th as this historical pattern suggests, if history repeats, we have a lot more to look forward to in the upcoming months.
Soft Landing on Credit, History Repeats?
The Wall Street Journal this week had a great article pointing out that in the past 80 years that the Fed has never been able to lower inflation “as much as it is setting to do now … by 4% … without causing a recession.” The key this time around is the unemployment rate is very low and consumers are still increasing their credit card debt, which is a sign of consumer confidence.
According to Citigroup, first-quarter credit card spending rose 23%, JPMorgan reported a 29% rise and Wells Fargo reported a 33% increase. JPMorgan also pointed out that charge offs (bad credit card debt) have remained below 1.5% for three straight quarters, which caused Jamie Dimon, the JPMorgan CEO, to say “Charge-offs are extraordinarily good” and added, “as a matter of fact, way better than they should be.”
So if credit remains available to consumers, it is very possible that the Fed could engineer a soft landing and avoid a recession as key interest rates rise.
Coffee Beans
South Korea, China and Japan could be found at the forefront of countries with a good electric vehicle charging infrastructure. There is a large discrepancy, however, between the number of electric cars and charging points in countries like New Zealand, where there were 52 electric vehicles for every one public charging point in 2020. In the U.S., this ratio is 18 EVs to one charging station. Source: Statista. See the full story here.
