Daily Commentary

MarketMinder’s View: New data from real estate lister Realtor.com show delistings (when homeowners remove their house from the market) are up 45.5% year-to-date in October and 38% from a year prior, extending elevated delisting rates seen earlier this summer. This article pins the lack of sales activity (and folks pulling their listings to hopefully reap higher prices next year) on economic uncertainty and, combined with the trend of people buying in lower-cost cities, the elevated cost of living. Perhaps those explanations do hold. There are probably also several would-be sellers who have chosen to wait for a more favorable market rather than accept a lower price in order to sell now. But as for the elevated delisting data, they lack any real meaning. Realtor.com’s delisting figures only go back to 2022, missing key periods like the aftermath of 2008’s financial crisis, when homes sat unsold amid falling prices for many, many months and even years. Also, it seems to us seasonal adjustment is really necessary here, just given the fact it is well known people tend to list in the spring and pull unsold listings in the fall. The lack of broader context makes the headline a stretch, in our view. Besides, with mortgage rates retreating, refinancing is up and it is likely more buyers will be out in the prime home shopping season next year (if the trend in rates persists). But for all the talk here of “troubling trends” of delistings and seeking homes in “refuge markets,” we will note: Residential real estate investment chiefly contributes to the economy via construction, not sales of existing properties. And even then it was 3.9% of US GDP in Q2, per US Bureau of Economic Analysis data. Many see the housing market as vital for growth, but the data show otherwise.

MarketMinder’s View: We have long argued gold’s purported “safe haven” or “store of value” labels are way off base. Now the Bank for International Settlements (BIS, commonly known as the central bank for central banks) seemingly agrees, but somehow concludes this is new and the fault of individual investors, who have chased heat and inflated the first so-called double bubble in stocks and gold. Thing is, gold has always been a speculative asset. It doesn’t rise reliably when stocks fall, and it has more volatility than stocks. If gold were a safe haven, it should be stable or at least consistently and fairly deeply negatively correlated to stocks. Yet a long historical look shows it lacks any significant correlation with prices or stocks, moving mainly on short-term sentiment swings. As for all the double-bubble talk, we would note: The fact both have risen together isn’t unusual, nor do stocks look very frothy. Furthermore, the BIS report itself noted, “Note, however, that these corrections took place over a variable and potentially long time frame: while the test has reliably detected past bubbles, it provides no information on when bubbles may burst. Hence, during the development phase of the bubble, investors jumping on the trend could still benefit from further price increases.” With all the logical flaws and oversight of gold’s traditional traits here, we would suggest this is correlation without causation and a pretty useless analysis.

MarketMinder’s View: Some good news for Europe’s supposed “sick man,” where industrial output jumped 1.8% m/m in October—beating analysts’ expectations markedly and accelerating from September’s 1.1%. While the strength was broad based, construction output’s 3.3% rise helped drive results. Autos’ -0.9% m/m fall was one of few soft spots, but this was tied more to September’s lofty rebound from August’s deep drop, which almost certainly stemmed from tariff-related uncertainty delaying new model year rollouts. All in all, this is likely a welcome result for Germans, since high financing and input costs and low demand have bogged down growth in the sector in recent years. Now, one month isn’t a trend, and global purchasing managers’ indexes suggest some manufacturing headwinds remained into November. But this is a matter worth watching, in our view. Overall, though, this was a solid report suggesting factories in Europe’s biggest economy were in better shape than widely appreciated in October. Ancient news for stocks, of course, which look 3 – 30 months ahead. But the mostly positive reactions here are helpful in framing sentiment—namely, moods may be warming toward German industry, a target of sharp pessimism in recent years.