US macro

US new home sales data is out. Sales are down a lot (below, 748K expected, 591K actual, middle row graph).

A doubling in mortgage rates will do that to you.


As always, the difficulty will be disentangling this from a slowdown that was/is meant to happen (an explicit goal of the Fed to cool rate-sensitive sectors that are overheated [volume] or over-exuberant [price]) from a general unintended spill-over-into-a-broader-slowdown thing.

In any case, clearly headwinds building for US homebuilder exposed companies like JHX and RWC, not to mention the consumer discretionary names that correlated well to new homes.

We see this as a likely/similar experience here, in Australia, for later in the year.

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