Rainbows, Unicorns, Mermaids and In-Laws

Main content

Home values are still 6% below 2006 levels, but the 20 City Composite Index has shown signs of a sustainable recovery after promising year-over-year price increases.

The huge stock rebound doesn’t mean that the trade war worries are over and everything is rainbows and unicorns. Markets are still struggling with uncertainty. The trade tensions with China continue. Recently, trade focus has been on Chinese foreign ownership restrictions. These requirements force U.S. companies to create joint ventures in order to do business in China and have often resulted in the theft of U.S. company intellectual property and trade secrets. In addition, rapidly rising short-term rates (especially LIBOR) have heightened concerns that companies and financial institutions could face funding pressures. Meanwhile, the latest U.S. economic data shows that consumers are mostly taking the stock market volatility in stride. The Conference Board’s consumer confidence index level of 127.7 remains near 18-year highs and the latest Case Shiller Home Price Index confirms that home prices continue to steam roll ahead. The 20 metro area index reported a monthly uptick in home prices of .8% In January and a 6.2% increase over a year ago. Home prices have now surpassed the April 2006 high achieved during the housing bubble.
Overall, market fundamentals remain strong but that won’t deter investors from analyzing every tidbit of economic data, looking for assurance after the recent stock slide. I hate to break it to you, but volatility is likely to be the in-law who won’t get off your couch. And market certainty, well, that is a mermaid. Nonexistent. Please follow the rise and fall and rise of the U.S. housing market on page 66 of the Global Perspectives Book.

Footer content