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Single-Family Housing Starts Rise 3.9%; Multifamily Continues Higher
Single-family housing starts rose in October, climbing 3.9% to 434k. September data was revised down to 414k from 427k. Single-family permits rose 5.1% to 430k. On a long-term basis, single-family activity remains very low. The modest improvement in starts and permits is a positive sign for new homes, reported later this month.
We had cautioned that excitement around the NAHB Housing Market Index print was misguided, as it often doesn't accurately forecast an increase in starts. October starts did not change this conclusion.
Initial Claims Drop 2k to 388k
Initial claims fell 2k last week to 388k (-5k from the upwardly-revised 393k). We have been looking for claims between 375-400k as the level that allows unemployment to improve, and an extended stay in this range will be a positive signal. Rolling claims fell 4k to 397k.
2-10 Spread Indicates Ongoing Margin Pressure
The 2-10 spread widened 1 bps versus last week to 175 bps. The ten-year bond yield increased 4 bps to 200 bps.
Financial Subsector Performance
The table below shows the stock performance of each Financial subsector over four durations.
Joshua Steiner, CFA
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