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October Housing Starts &. Permits Report Released Today - YouTube
Channel: TD Ameritrade Network
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founder the chief strategist of path
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trading partners happy wednesday kind of
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a mixed uh result here certainly though
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housing remains a focal point for
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investors for traders we want to see
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some strength that are continuing it's
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been the pillar of strength in many ways
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throughout the pandemic bob
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yeah i think you hit it right on the
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head ben and good morning by the way the
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the building permits is a little bit of
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a future indicator but it's not really
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reliable from the perspective that
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permits mean they can build a house it
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doesn't mean that they will they have an
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expiration date
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uh depending on what region so it's not
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worth speculating on how long of an
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indicator it is
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starts is what they've actually started
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i mean it's a very simple number right
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how many houses have been started and
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when a home has started other than
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drastic weather used to be 20 30 years
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ago that snow would stop that doesn't
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stop them any longer so those starts are
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going into inventory and the fact that
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those starts are a little bit lower i
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think fit in with some of the slowing
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down we're seeing with a little bit
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higher rates i don't think it's any sort
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of death knell for the housing market at
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this stage but we all know that the rise
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we've seen in housing prices
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at the rate we've seen it rise is
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unsustainable and this could be a little
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bit of a canary in the coal mine i don't
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put too much into it building permits
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fall and housing starts fall the next
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couple of months yes
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the permits are there to be turned into
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starts doesn't mean that they will noted
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bob and a great breakdown there in terms
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of a description of this number here and
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uh what to watch for in terms of the uh
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ripple effect that it has or the
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indication it has as far as economic
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conditions let's talk a little bit about
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some of the other uh focal points for
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traders and investors this week we're
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kind of watching the dust settle from
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the fed central bank activity jobs
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inflation but we've got a handful of fed
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speakers uh we recently heard uh again
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from a couple uh what are you listening
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for in terms of some of these specifics
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here as we uh really kind of determine
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try and balance here where we stand as
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far as a taper and then ultimately the
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next step a rate hike
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well i'm looking for any deviation from
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the script which i actually think we saw
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in a very big way from james bullard
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yesterday st louis fed president bullard
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was more hawkish than i'm used to him
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being he's somebody that has
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been a little bit usually classified on
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the dovish side and he was talking about
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the potential for movement or more
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aggressive tapering i don't have the
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quotes in front of me so i don't want to
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misspeak but i remember getting the
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impression that he was a little bit more
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hawkish than i'm used to him being now
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as you mentioned tons of fed speakers
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yesterday tons of fed speakers today
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yesterday other than james bullard
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pretty much on script i didn't see
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anything but we've got a few today as
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well so i'm looking for anything that
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deviates from the script it's
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interesting because you look at the
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yield curve you and i have talked about
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that quite a bit lately and the yield
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curve is just dramatically uh flatter
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than it's been despite the steepening
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that we got yesterday you go all the way
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back to
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let's look at the fives tens or the
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fives thirties uh june 30th 119 on the
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5s 30s 77 basis points right now
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uh fives tens 58 37 right now and we've
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got the two-year note
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at the high for the year at about 50
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between 52 and 53 basis points 54
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settlement yesterday was a high
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settlement for the year so we're clearly
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seeing that change
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people i don't think realize how
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dramatic of a change it was again just
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going back to june 30th 25 basis points
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on the two-year about 52 and a half
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right now so more than double you
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compare that to the 30 year 206 on the
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30th 204 today not only is it not higher
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but it's barely moved and it's moved to
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the downside that is a dramatic
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flattening what is that flattening
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telling us bob in terms of expectations
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for the fed and where investors are kind
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of placing their bets
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well it's telling us one solid thing
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that the market at least and the market
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could be wrong believes that inflation
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is not a long-term phenomenon it either
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believes in a slowdown economically or a
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more active fed you take it to the front
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of the curve and it's telling you
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there's a more active fed
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i haven't looked at fed funds
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probabilities in quite a while it's
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probably start time to start looking at
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those again and the cme group has some
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tools with some predictive importance
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that you can look at
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but looking at it from that perspective
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it's time to start i think looking at
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fed fund probabilities for change not
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just tapering because i i don't think
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the market the equity market
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specifically is priced that in although
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if you look at just a daily s p chart
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you're starting to see a developing not
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a formed so it's not predictive but a
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develop developing potential double top
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that's very very large
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um it would have a very long measured
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target to the downside long way before
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that's triggered it hasn't even properly
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formed yet but it's starting to show
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itself bob we were just looking at the
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five year second and going how it's uh
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well into new 52-week highs as we speak
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you've got the 10-year on the right the
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30-year on the left they're holding
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inside this range right now so kind of
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supportive of the conditions that we've
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been seeing the environment uh
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continuation more likely than change as
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we like to call it let's talk about the
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us dollar and some of the foreign
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currencies that have been focal points
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for many a minute ago we were talking
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about some of the weakness in the yen
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strength in the us dollar the pound
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after a 10-year high cpi number i mean
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basically uh it's interesting to watch
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different currencies around the world as
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central banks kind of
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manage or move their chess pieces around
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and try and navigate this current
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environment
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i'm hearing again basically the number
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overnight is suggested that we could see
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a rate hike or uh pushing in the
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direction for the uk to move as early as
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december now
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yeah the uk positioning is interesting
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because there were a lot of people that
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were surprised by no activity in the
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last bank of england meeting quite
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surprised myself included i didn't
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necessarily think they would hike rates
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but i thought they would adjust their
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quantitative easing they didn't do
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either and now they're staring in the
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face of 10-year inflation highs as you
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just mentioned i i do a lot of
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communicating with michael zoremsky
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actually you had him on before he's very
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very smart guy
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and i think his comments about the
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dollar uh being affected more by what's
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going on with the other currencies is
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spot on you're seeing the british pound
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rally but the rest seen behind the curve
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and that british pound rally didn't
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sustain very well when you look at the
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flattening of the yield curve that we
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just talked about a second ago
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that essentially means to me that the
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dollar becomes a flight to safety not
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necessarily a rate play you're seeing
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that sort of relay in the yen as well
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and you're seeing gold and silver again
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today we talked about this before the
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long end doesn't move gold and silver is
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a good play uh bitcoin's struggling with
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some other stuff and i know you want to
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talk about that but struggling with some
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other things going on but we're likely
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to see a bitcoin rebound off of that as
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well if this trend were to continue
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gold real quick chart uh the 50-day
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moving average how we're holding up
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above it here you can see the rally we
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talked about that with michael as well
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how the dollar strong uh bob but gold
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has been well here's silver also working
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its way above the 50-day moving average
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this blue line up and through the 25
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level recently bob um in terms of a
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couple focal points here i just want to
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point out cpi out of canada just came in
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for the most part in line with
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expectations year-over-year 4.7
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month-over-month 0.7 so no real scare
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from our neighbors to the north there
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along the lines of what we saw here in
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the u.s and across the big pond most
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recently but moving forward here bob
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i've kind of lost sight in terms of some
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of the economic data that's due out we
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mentioned the fed speakers but kind of a
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light a week in terms of market moving
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numbers seems like the focus is on
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retailers the earnings the retail sales
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number from earlier this week but what
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are you watching in terms of what could
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continue this move in the dollar derail
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it or potentially uh the same here in
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terms of the indices that trend we've
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been seeing what do you what do you have
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your eye on in terms of potential market
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moves in the next week or so
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so it's interesting we brought up the
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precious metals that's really one of the
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things i'm looking at people talk about
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the inverse relationship between the
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dollar and precious metals uh phil
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streibel i saw his interview with you as
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well
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that was very good a very good call by
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him i think what we're looking at with
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precious metals uh that should be in
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focus because we've got a seasonal
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tailwind behind gold and silver but not
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only that
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the talk about the inverse relationship
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with the dollar and the gold with dollar
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and precious metals is based upon
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inflation expectation and interest rates
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and inflation expectations are high
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right now and they're not falling and
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interest rates are not rising so that
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means the dollar can go up in a flight
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to safety and so can gold and silver so
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i'm watching that relationship very very
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closely if you see that breakdown
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something has changed in the narrative
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right now that narrative is high
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inflation the fed's not acting the bank
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of england's not acting so inflation
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will be here in the medium term you buy
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gold along with the seasonal tail when
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silver is part of that as well big time
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bob appreciate you joining us here this
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morning we'll continue to watch medals
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and the dollar the relationship they
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share and how they are both a reflection
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of some of the uh thoughts you brought
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to the table this morning
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