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Market Snapshot 01/16/2025 – A Little Data

Good Thursday AM from your Hometown Lender,

A little data out today…

Retail sales being the most important and while it was less than expected (ex autos) it was double last month’s reading. That is normally a bad signal at the open and while bonds did move sideways early on in the trading day, the have improved substantially with the 10yr 20bps better than where it was at the close on Tuesday. Yes almost .25% in the blink of an eye. Once the market starts leaning as it is currently over thoughts the Fed will cut this year, even stronger data is not going to stop it. A win for us and for the greater market. Not much data tomorrow. I do see the 10yr getting down to 4.50% before we hit much of a wall but it may not happen all at once.

Here are a couple of good pieces from the WSJ.. the first one is particularly interesting.. when the value of the stock is less than the underlying asset value, you have to take notice.

Wall Street Thinks Homes Are Overpriced

House hunters don’t need to be told that property is too expensive right now. But Wall Street has an idea by just how much.

The stock market is pricing portfolios of American homes at a hefty discount to what houses are changing hands for in the open market. Shares of single-family landlords Invitation Homes and American Homes 4 Rent are trading at 35% and 20% discounts to their net asset values, respectively, according to real-estate analytics firm Green Street.

If a large and persistent gap opens up between the property values implied by publicly traded stocks and private markets, it can mean a correction is on the way. In 2020, shareholders in listed office stocks priced in upheaval caused by the pandemic shift to remote working months before values started to tick down in private sales.

“Share prices are signaling that single-family-home prices are too high and are not sustainable,” says John Pawlowski, a managing director at Green Street.

Traders are feeling more confident the Federal Reserve will cut rates this year, after a key inflation gauge came in cooler than expected Wednesday. Core consumer prices, which exclude volatile food and energy categories, rose 0.2% in December from the previous month.

Stay safe and make today great!!!