Shiller highlights graph of CME futures on CNBC

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).

CNBC graph cropped B


The graph shows: a) how the recent rally in the  historical Case Shiller index converges to the front contract, b) bids and offers that are relatively tight out to 2016, c) the seasonality that exists in the Case Shiller indices also showing up in the futures contracts, and d) that futures prices show continued year-on-year (albeit slower) gains versus spot index levels.

Maybe with the posting of this graph to the CNBC audience we can cross “lack of awareness” off the list of reasons as to why there is not more trading in the CME Case Shiller (home price index) futures?!?

Please feel free to contact me if you’d like to learn more about these contracts, or if you have any questions.