There's a reason this week's EIA survey showing gasoline and oil supplies declining has failed to stop RBOB prices from collapsing to 7-month lows: The start of the summer has done nothing to revive sluggish demand. That's because despite what the EIA survey said, little has been done to reduce record fuel inventories.
The stock market is luvin' McDonalds stock, which has continued its recent relentless rise to all time highs, up 26% YTD, oblivious to the carnage among the broader restaurant and fast-food sector. There is a reason for Wall Street's euphoria: the same one we discussed in January in "Dear Bernie, Meet the "Big Mac ATM" That Will Replace All Of Your $15 Per Hour Fast Food Workers."
Following the modest bounce in existing home sales (and disappointment in starts and permits), new home sales bounced in May to 610k (after plunging 11.4% in April, now revised to a 7.9% drop).
For now affordability doesn't matter...
Of particular note is that median new home prices surged to $345,800 - an all-time record high.
In fact, a closer look shows that home prices are exploding higher...this is the fastest 3-month spike in prices since Jan 2011... (and up 16.8% YoY)
Following disappointment from China last week, and Europe this morning, US PMIs (both manufacturing and services) dropped and disappointed as it appears the lagged impact of China's slumping credit impulse are finally hitting the world's economies.
With 'hard' data collapsing to 13 month lows, it is not surprising that 'soft' survey data is finally catching down with Manufacturing at 9-month lows.
Who could have seen this tumble in 'soft' data coming?
First they came for the Trump Trade... then they came for the hope. And, as a result, BofA has thrown in the towel on its economic rebound for this year.