Real Interest, Rest Stops, and There They Go Again
Finally, we close with brief comments on Real Interest, Rest Stops, and There They Go Again. First, the drop in interest rates appears to be having a salutary effect on home purchases. According to the latest data from the Mortgage Bankers Association, New Home Purchase Applications rose 17.9% compared to a year ago and Existing Home Purchase Applications rose 7.0%. We see the consumer having Real Interest in purchasing a home again. Second, according to data from truck companies such as JB Hunt and Covenant Transportation, truck volumes fell 7% or more in Q2 as the Global Inventory Correction roared along. For trucking companies, we see their drivers taking extended Rest Stops. And third, large club stores began to raise prices aggressively to offset higher costs and to ensure their profit continues to grow at a rapid rate. This is similar to what occurred in 2005 – 2008. Examples of products with large price increases recently include parmesan cheese up 14%, hot dogs up 11%, office paper up 10%, tuna fish up 18%, and guacamole up 33% to 54% (as the lower cost packaging size disappeared from the store). For the consumer, it is There They Go Again.
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