Rebel Capitalist News Existing Home Sales Plummet, Will Fed Pump Stocks Higher? Consumer Sentiment Tanks
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Jan 25, 2025 Existing home sales in the U.S. have plunged to their lowest levels since 1995, raising concerns about stagnant prices and low demand. The discussion dives into how Federal Reserve policies and rising mortgage rates are affecting both the housing market and stock dynamics. With a focus on market sentiment, the podcast reveals how psychological factors influence investor behavior, especially amid economic uncertainties. Additionally, deteriorating consumer sentiment raises red flags about inflation expectations and possible future economic challenges.
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Declining Home Sales Indicate Low Demand
- Flat home prices don't signal a healthy market; they mask low demand.
- Low existing home sales combined with flat prices indicate a precarious balance susceptible to price drops if supply increases.
Look Through the Windshield, Not the Rearview Mirror
- Focus on forward-looking indicators like market dynamics and metrics, not just past price changes.
- Analyze underlying trends to assess future risks and opportunities, rather than relying on lagging indicators.
Fed's Influence: Psychology Over Mechanics
- The Fed influences markets through psychology, not just mechanics.
- Their actions signal intentions, impacting risk perception and driving market behavior.