Location Strategy Chartbook 062924

After Thursday night’s debates, the market is digesting the news

For the first time, the average economist’s forecast (compiled by Bloomberg) shows less than two full Fed rate cuts by the end of the year.

On average, it has taken about two years for a recession to begin following the start of a Fed hiking cycle

The Fed’s balance sheet is now at its lowest level since December 2020, down $1.7 trillion from its peak in April 2022.

How much more QT is needed to unwind all of the QE from March 2020 – April 2022? $3.1 trillion.

Tech-heavy Nasdaq Composite and the Dow Jones Industrial Average headed in opposite directions.

This also paints the story of the economic divergence when gains are heavily weighted in 1 sector, 1 population/demographic.

Investors are piling into AI companies and Nvidia alone is responsible for 15% of the S&P 500’s ascent

Electric Vehicles, looking at you. Global child labor trends from 2000 to 2020 for children aged 5 to 17 in hazardous and other work

Globally, services exports have roughly tripled since 2005, now making up 7% of the world's GDP in 2023.

India's services exports grew from $53 billion to $338 billion between 2005 and 2023 — almost double the rate of the rest of the world — and now form nearly a tenth of the national GDP.

The rise in real estate prices has boosted household asset/liability ratios, particularly among Boomers

Demographic growth, household formation and the type of housing desired and that Buyers can afford is going to be continually impacted by the falling birth rates and the affordability of childcare

New US Home Construction Plunges to Slowest Pace Since June 2020

Housing starts decreased 5.5% to a 1.28 million annualized rate last month, according to government data released Thursday.

Building permits fell 3.8% to a 1.39 million annual rate, also the weakest since June 2020. The declines in starts and permits were broad across multifamily and single-family units. Authorized permits for single-family homes dropped for a fourth straight month to the slowest pace in a year.

US home prices are hitting new high while home sales have fallen to very low levels.

There have been just two months in the past decade with fewer home sales: October 2023, when mortgage rates jumped to a 23-year high, and May 2020, when the onset of the pandemic brought the housing market to a halt and home sales to a record low.

The overall picture is people are priced out. A small portion of the population can afford to buy which means the housing market is not healthy

Median home prices offers a view of conflation of the data where the details of what is selling is not apparent such as:

• Home size

• Home condition

• Location

If homes that are selling in a given zip code or city are the highest priced homes, median prices will get pushed up.