Political Calculations
Unexpectedly Intriguing!
30 November 2021

The market for new homes in the U.S. shrank in October 2021. The initial estimate of the market cap itself for the month is $28.31 billion, which is 0.9% less than one year ago, and 6.0% below December 2020's peak of $30.12 billion.

Trailing Twelve Month Average New Homes Sales Market Capitalization, January 1976-October 2021

The market for new homes in the U.S. has shrunk in both real and nominal terms.

Meanwhile, the annualized number of new homes being sold in the U.S. has nearly dropped to levels last seen in December 2019.

Trailing Twelve Month Average U.S. New Homes Sales, January 1976-October 2021

The shrinking new home market represents a source of headwinds for the U.S. economy in 2021. We'll follow up with a look at the affordability trends for new homes later this week.

References

U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 24 November 2021. 

U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 24 November 2021. 

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29 November 2021

A lot can happen to the outlook for the S&P 500 (Index: SPX) with the random onset of new information.

Friday, 26 November 2021 provides a good example. After having been closed for the Thanksgiving holiday, what is normally a low volume trading day instead turned into a noteworthy event because of the development of what is now being called the Omicron variant of the SARS-CoV-2 coronavirus, which prompted new global travel restrictions with the countries in Africa where the new potentially vaccine-resistant variant was detected.

The initial events related to the new variant took place while U.S. markets were closed on Thursday, 25 November 2021, so by the time markets opened on Friday, stock prices gapped down at the open, then proceeded to close some 2.27% lower than they had previously closed on Wednesday, 24 November 2021.

From our perspective, the change in stock prices is consistent with a small Lévy flight event, as U.S. investors shifted their attention from 2022-Q2 inward toward the nearer term quarters of either 2021-Q4 or 2022-Q1. As it happens, that change moves the trajectory of the S&P 500 from the upper edge of the redzone forecast range on the alternative futures chart back into the middle of the range, which is telling.

Alternative Futures - S&P 500 - 2021Q4 - Standard Model (m=-2.5 from 16 June 2021) - Snapshot on 26 Nov 2021

We're able to make that determination because of the assumptions we made when we initially set up the redzone forecast range many weeks ago. We had assumed investors would be focusing on the upcoming quarter of 2022-Q1 in the final weeks of 2021-Q4, where we set the middle of the future end of the range to correspond to the dividend futures-based model's projection for what the level of the S&P 500 index would be if investors were focusing on that point of time in the future. (The trajectory associated with 2022-Q1 is not much different from that for 2021-Q4, which is why we say investors may be focusing on either of these quarters.)

We're also fortunate in that we're near the end of period where the past volatility of stock prices prompted us to generate a redzone forecast range in the first place. Just looking a little further forward to the end of the forecast range to look at the relative positions of the trajectories for 2021-Q4/2022-Q1 and 2022-Q2 confirms a shift in investor focus from 2022-Q2 toward the earlier quarters would lead to a shift in the level of the S&P 500 of the magnitude that has occurred.

Since this is an example of how the random onset of new information affects stock prices, here are the headlines we noted for their market-moving potential during the holiday-shortened Thanksgiving trading week.

Monday, 22 November 2021
Tuesday, 23 November 2021
Wednesday, 24 November 2021
Thursday, 25 November 2021
Friday, 26 November 2021

The CME Group's FedWatch Tool is still projecting a quarter point rate hike in June 2022, the odds of additional hikes later in the year have dropped below 50% with last week's pandemic developments.

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26 November 2021

We're posting this super early in the morning to help get you off to a strong start in solving a problem you already have. That problem? What to do with the leftovers now crowding your refrigerator from yesterday's Thanksgiving dinner!

Sam the Cooking Guy has a solution for what to do with your leftover stuffing: use it in your breakfast omelette! We've queued up the following video to get you going. Just a quick note before you start watching - he does a commercial for SimpliSafe's home security system during it, so when you get to it at about the 4:47 mark, you can skip past nearly all of it by advancing the video to the 6:06 mark:

Here's the quick list of ingredients in the order they're added to the non-stick skillet (at low heat):

  • Salted butter
  • Leftover stuffing
  • Eggs (he uses three eggs beaten with salt and pepper)
  • Cheese (he uses two slices of American singles)

And that's pretty much it. If you want help with the rest of your leftovers, we have some options listed below from previous Thanksgivings....

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25 November 2021

For as long as we've celebrated Thanksgiving at Political Calculations, we've never once provided any information for doing the one thing most Americans' Thanksgiving dinners depend upon. Cooking a turkey.

Sure, we've featured information on how to carve a turkey. We've twice featured information on how to avoid hurting yourself and others when cooking a turkey. And we've featured the Swedish Chef cooking a turkey, although to be fair, no turkey was actually cooked during that production.

So we're going to rectify that situation today by featuring two videos that will take you through the process of cooking a turkey! But before we begin, let's just say that if your turkey is still frozen rock solid, you should skip the videos and find out what restaurants might be open near you instead....

Our first featured video will take you through the basics of what you need to know about the full process of cooking a turkey in about 12 and a half minutes. Please be aware the process in real life takes much longer....

Our second video runs a little over eight minutes and features much of the same information, but is aimed for a slightly different audience. An audience that's somewhat intimidated by not just cooking a turkey, but being judged for how well they might cook it.

Have a Happy Thanksgiving, and good luck with your turkey this year!

P.S. We're not done with cooking tips, so check back in tomorrow for an idea of what to do with your Thanksgiving dinner leftovers!

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24 November 2021

In 2020, the average live weight of a turkey raised on a U.S. farm was nearly unchanged from 2019's final recorded average of 32.7 pounds per bird. That stagnation ended what had been a 40 year long trend of growth in the average size of turkeys produced on U.S. farms.

Average Live Weight of Turkeys Raised on U.S. Farms, 1929-2020 with Estimate for 2021

In the chart above, we've shown that new trend of stagnation continuing based on early signs that production factors such as the rising costs of feed, fuel, and labor for producing turkeys in the U.S. will affect the growth of the average turkey much the same as it did during the inflationary 1970s. Should the finalized data for 2021 confirm that's the case when it is released next year, it will indicate U.S. turkey producers are dealing with today's inflation similarly to how they did during that period of relative stagnation for the U.S. economy.

References

U.S. Department of Agriculture National Agricultural Statistics Service. Livestock Historic Data. [Online Database: Survey - Animals & Products - Poultry - Turkeys - Production - Turkeys Production Measured in Head - Total - National - US Total - 1929-2021 - Annual - Year]. Accessed 14 November 2021.

U.S. Department of Agriculture National Agricultural Statistics Service. Livestock Historic Data. [Online Database: Survey - Animals & Products - Poultry - Turkeys - Production - Turkeys Production Measured in LB - Total - National - US Total - 1929-2021 - Annual - Year]. Accessed 14 November 2021.

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Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

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