Perhaps the high point of last week’s encouraging economic news was the report from the National Association of Realtors that existing home sales rose 7.2% in July, marking the first time in five years, NAR said, that home sales increased for four months in a row. That report offset the earlier news that housing starts dipped in July to a level that is down 38% from last July’s starts.
There are two key housing reports scheduled for this week: The Case-Shiller home price index will be released on August 25, while new home sales will be released on August 26.
Orders for durable goods will be released on August 27, while second quarter GDP will be released on August 28–the consensus is for a 1.5% decline, following a 1.0% drop in the initial estimate for the quarter.
There will be two key reports on consumers this week, too: The Conference Board’s Consumer Confidence report arrives August 25, while the Reuters/University of Michigan consumer sentiment report is released on Friday the 28th.
As for the markets, The Wall Street Journal‘s survey on August 24 of three gurus who correctly called the March low suggested that at least one of them–Jeremy Grantham of GMO–now believes that the markets are at fair value. Grantham also expects, he writes, “seven lean years” for the market, and GMO now recommends “taking some risk units off the table, including becoming underweight in equities.” Read Grantham’s latest newsletter on the subject here.