[Charts] Real Estate, Tech Buyers, and Inflation Relief

Lou Basenese

Friday, July 15, 2022

When Fridays roll around in the Trend Trader Daily Nation, we roll out the charts.

All it takes is a quick glance — and you’ll be up to speed and poised to understand and profit from the market’s most important trends.

This week, I’m shining a light on some price pressures that are actually easing, even as headline inflation numbers keep hitting decade highs.

Then, we’re checking back in on the housing market with another stat that supports our bearish stance.

Last but not least, we’re ending on an undeniable bullish development, at least for the tech sector.

So without further ado…

Inflation Ease

This week’s red-hot Consumer Price Index reading of 9.1% shocked everyone, possibly including the Fed.

And all of a sudden, talk of a 100-basis point hike materialized to help put a lid on inflation.

But before you panic, remember the data…

As I shared last month, there are four early signs that inflation might be easing, including the cost to ship goods from China to the U.S.

Remember, shipping costs are a major and early input for global inflation.

As you can see, prices have more than halved from the pandemic peak, based on the latest reading.

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Granted, we’re still at prices that are three times the average pre-pandemic cost.

And it’ll take months for the shipping price declines to work through the system and reduce consumer prices.

But the takeaway couldn’t be clearer: relief is coming!

Home Buyers Bail

Speaking of cooling, Americans’ appetite for new homes appears to be reversing course.

I can’t say I’m surprised, as I’ve been warning about the likelihood of a housing pullback for almost two months now, thanks to soaring mortgage rates and runaway prices.

But here’s the latest proof…

Per Redfin, nearly 60,000 buyers walked away from purchase contracts last month. That’s equal to 15% of total transactions and represents the highest level of cold-feet cancellations since the first lockdowns went into effect in April 2020.

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Translation: Look out below! As buyers disappear, home prices have nowhere to go but down. The laws of supply and demand guarantee it.

So if you’re looking for real estate bargains, just wait.

When it comes to technology bargains, however, the window might be closing…

Backing Up the Truck

As we all know, corporate insiders might sell for a host of reasons, but they buy for only one: they expect stock prices to go up.

That makes insider buying activity one of the most reliable leading indicators in the market.

Don’t look now, but as the tech sector hemorrhages, insiders are backing up the truck.

As you can see, the insider buying-to-selling ratio has never been this high in the last decade.

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We’d be wise to follow their lead.

So stay tuned next week, as I plan to research and share at least one tech company with massive insider buying.

Ahead of the tape,
Lou Basenese
Lou Basenese


Tags: Real Estate Inflation

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