Housing is major headwind for the economy and for stocks

 

 

 

 

The latest data show the home builders sentiment index (HMI) declined. See above chart (click on the chart to enlarge it).

 

This is an important trend because it suggests the housing sector is in trouble. Because of the size of this sector, it will be a major headwind for the economy. It will cause business activity to grow at a much slower pace. I am expecting this trend to continue for some time.

 

Maybe this is the reason inflation, commodities and yields are declining. The economic slowdown is already having an effect on these important sectors of the economy.

 

Of course, all this has a major impact on the investment strategy we should follow.

 

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George Dagnino, PhD

Editor
The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull or Bear Markets
 

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