CME markets have been mostly quiet this morning as Case Shiller numbers came out generally in line toward CME quotes for the Aug ’15 contract. The two exceptions seem to have been in the BOS and SDG contracts where Nov ’15 contract prices have dropped sharply (as shown in the … Read More
While trading in longer dated contracts is more at the heart of hedging home price risks, my sense is that confidence in longer-dated markets is a function of believing that shorter-dated contracts are priced tight and correctly (that is to expectations of pending Case Shiller releases). Tight spot contract prices … Read More
With yesterday’s release of the Case Shiller index numbers for Dec. 2014, several research firms have posted their projections for home price appreciation (HPA) for 2015. What can you do with these forecasts whether you believe them or think that they are too bullish/bearish?
I’d submit that the CME Case … Read More
Case Shiller futures prices are mixed after this morning’s release of November numbers.
As of noon, there have been 3 trades (DENG15, DENK15, and SFRX15).
Bid/ask spreads in … Read More
As I’ve written earlier, I’m trying to get first-time readers (and the press) to focus on the CUS Nov ’16 contract as a benchmark of market sentiment for the overall home price market. A benefit of focusing on one contract is that after readers are used to following one price, … Read More
Since so much of the CME Case Shiller futures trading takes place in the front contract, readers should be aware of any tools to help them in their projections of near-forward Case Shiller values. One of the best resources is the publicly available Zillow Real Estate Reserach blog http://www.zillow.com/research/april-2014-case-shiller-forecast-6997/ (… Read More
Since there has been so little trading in the first halves of the last 3-4 months I’d thought that we might have more luck with early-in-the-month trading by suggesting that trades focus on a smaller set of contracts. As such, I’ve pulled together information on the CUS, LAX and NYM … Read More
I just got the answers that I was looking for in response to a reader’s question on how to tie out the CUS 10 index valuation using the recently announced new weights. The net impact of this corrected approach- this month- was a lower CUS index than a simple weighted … Read More
When Professor Robert Shiller was asked this morning, on CNBC, for his views on market expectations of forward home prices, he had a graph prepared to illustrate how the 2018 CUS contract prices were consistent with ~25% gains (over today’s spot levels).
The graph shows: a) how the recent … Read More