Gavekal Capital: Pending Home Sales Can't Blame The Weather For The Latest Miss

Thursday, May 29, 2014

Pending Home Sales Can't Blame The Weather For The Latest Miss

Pending home sales rose by only 0.4% in April vs estimates of a 1% month-over-month gain. Pending home sales are down over 9% year-over-year. If you are living in the West or the Northeast than that decline looks great compared to fall they are experiencing in those regions. The West is down 15% year-over-year and the Northeast is down 12% year-over-year. The silver lining is that pending home sales is suggesting a gain over the coming months for existing home sales perhaps back to the 5 million annualized level. Perhaps if we continue to get a decline in bond yields like we did yesterday (the 10-year is down another 3 bps so far today) then lower mortgage rates will incentive more buyers back into the market.

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Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
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