Global News August 23, 2018

  1. BBC
  2. Global News August 23, 2018

“U.S. New-Home Sales Fall to Nine-Month Low While Supply Rises.”

U.S. purchases of new homes unexpectedly dipped to the weakest pace in nine months as higher prices and mortgage rates sideline demand, adding to signs of a cooling in the housing market, government data showed Thursday.
The first back-to-back decline since January was led by a 52.3 percent drop in the Northeast to 21,000 home sales, the fewest since 2015, as well as a 3.3 percent decline to 355,000 in the South, the biggest region. The West and Midwest recorded gains.
The figures follow data Wednesday showing sales of previously- owned homes fell for a fourth month to the lowest since early 2016. A separate report on Thursday showed home prices rose 1.1 percent in the second quarter from the previous three months, the smallest gain in four years, according to the Federal Housing Finance Agency.
At the same time, a robust job market and higher take-home pay following tax cuts should keep demand for new homes stable. The number of properties sold but not yet under construction rose to 212,000, the highest since November, a sign builders will stay busy in coming months. In addition, 65,000 homes were for sale but not yet started, the most since 2008.
New-home sales, tabulated when contracts get signed, account for about 10 percent of the market. While volatile, they’re considered a timelier barometer than purchases of previously owned homes, which are calculated when contracts close and are reported by the National Association of Realtors.


“Fed’s George sees more rate hikes, despite Trump: interviews.”

The Federal Reserve should raise U.S. interest rates further this year and probably next year as well, despite President Donald Trump’s displeasure at tighter policy, Kansas City Federal Reserve Bank President Esther George said in interviews aired on Thursday.
“Based on what I see today, I think two more rate hikes could be appropriate,” along with several more next year as the Fed aims to move interest rates to a neutral setting of about 3 percent, George told Bloomberg TV. The interview was taped on Wednesday, one day before the start of an annual central bankers’ conference in Jackson Hole, Wyoming, which she hosts.
Trump earlier this week said he was “not thrilled” by the rate hikes that Fed Chairman Jerome Powell has overseen since Trump put him in the job in February.
The Fed began its current round of interest-rate hikes under Fed Chair Janet Yellen in December 2015, and since December 2016 has lifted them every quarter, including in June, when George joined her colleagues in voting for the increase.
Fed Chair Powell is due to speak Friday at the central banking conference. He is widely expected to signal rate hikes will continue, given 3.9 percent unemployment and inflation that’s now near the Fed’s 2-percent target.
The Fed currently targets short-term rates at between 1.75 percent and 2 percent. This is still well short of 2.5 percent to 3 percent, the level at which most Fed officials believe rates would no longer act as a stimulant to economic growth.
George is one of the Fed’s most hawkish policymakers and in the past has consistently advocated a faster path of rate hikes than her colleagues. In the interviews aired Thursday, however, she took care to hedge that view, a possible signal that the Fed is reaching a point where rate-hike policy is less predictable.


BBC News
“Russia says 63,000 troops have seen combat in Syria.”

Russia has revealed the extent of its military involvement in the war in Syria. A defence ministry video said more than 63,000 Russian military personnel had «received combat experience» in the country since September 2015. The Russian air force had meanwhile flown 39,000 sorties, destroying 121,466 «terrorist targets» and killing more than 86,000 «militants», it added. There was no mention of any Russian military or Syrian civilian casualties.
The Syrian Observatory for Human Rights, a UK-based monitoring group, says at least 7,928 civilians and 10,069 combatants have been killed in Russian air strikes. The defence ministry video also said Russian forces had tested 231 types of weaponry in Syria, including aircraft, surface-to-air systems, and cruise missiles.
Russian forces have played a key role in consolidating the position of their ally, Syrian President Bashar al-Assad, over the past three years. The conflict has swung heavily in his favour, with rebel forces being routed in many parts of the country, most recently in the Eastern Ghouta region near Damascus and in the south-western provinces of Deraa and Quneitra.
Officials in Moscow have stressed that Russian air strikes only target «terrorists», but activists have said they mainly hit mainstream rebel fighters and civilians.
UN war crimes investigators have also said that Russian and Syrian government aircraft have bombed hospitals, schools and markets, which are protected under international humanitarian law. Both militaries have denied the allegation.
A US-led multinational coalition battling the Islamic State (IS) group has said it has carried out 29,826 air strikes in Syria and neighbouring Iraq since August 2014.
The coalition has assessed that at least 1,059 civilians have been unintentionally killed in the strikes. However, an organisation that tracks allegations of civilian deaths, Airwars, says between 6,500 and 10,000 civilians are likely to have died.


“Will the Market Crash If Trump Is Impeached? Here’s What Analysts Say.”

How seriously should people take Donald Trump’s claim that stocks would crash if he were kicked out of office? As you mull over an answer, consider what someone in the other party would say.
Maybe there’s a less subjective way to judge — with earnings estimates, perhaps, which have changed a lot during his presidency. Or maybe valuation. Neither is perfect, but nor is any quest for science in the stock market.
Before digging in, acknowledge that stocks have enjoyed unusually strong gains since Election Day, with the S&P 500 rising at an annualized rate of 20 percent, crushing the historical return of 9.4 percent since 1927. At the same time, note the Trump return is only about 1 percentage point higher than the yearly gain since March 2009, an era mostly overseen by Barack Obama.
Changes in earnings forecasts under Trump have been stark, compared with history. Last December, analysts were predicting S&P 500 earnings of about $146 a share for 2018, forecasts that, thanks largely to the president’s tax cuts, soared over the next two months, rising four times as fast as any period Bloomberg tracks. And companies made good: S&P 500 operating income jumped 24 percent in each of the last two quarters and analysts see combined EPS of $159 a share for all of this year.
Past instances of presidential turmoil showed contrasting stock returns. In February 1974, when Congress initiated impeachment proceedings against Richard Nixon, the market was in the midst of a 1973-1974 bear market that was punctuated by an oil crisis and an implosion of the world’s foreign change rate system. The S&P 500 tumbled more than 30 percent through October that year.
In December 1998, when the House voted to impeach Bill Clinton, stocks kept rising during the last stage of the Internet boom. The S&P 500 climbed for five straight months till Clinton’s acquittal in February 1999.
The S&P 500 was virtually unchanged as of 9:45 a.m. in New York, and the index barely budged Wednesday in the aftermath of convictions of the Trump associates that sparked renewed discussion of a potential impeachment.
“Equity markets don’t seem to care, and we think they are right,” Nicholas Colas, Co-founder of DataTrek Research, wrote in a note. “Rates are low, the dollar is strong and corporate earnings remain robust. Those are the only things stock prices can (and should) actually discount.”