Sean D. Emory
Three Data Points to Summarize the Week Ending 3.24.23
FED Balance Sheet Up, but Less So. Added roughly $300B the week prior and ~$100B this week.
Tesla price cut leads to demand boost. The question is whether this is one-off or ongoing…
Zillow data suggests a positive outlook. 262 million visits last month and 2% market share gains.
FED BALANCE SHEET +$100B WEEK OVER WEEK, DOWN FROM WEEK PRIOR (~$300B).
Each year, a new indicator emerges as a key metric to follow. Over the last two weeks, the focus has shifted from tracking jobless claims on Thursdays to tracking the Federal Reserve's balance sheet. The rationale behind this shift is apparent: we are attempting to keep a close watch on the level of demand that banks have for the Federal Reserve's loan facilities. The most recent week saw a decrease compared to the previous week, which indicates that banks are seeking less liquidity. Time will tell, but the step-down should be welcomed. Some are suggesting this is QE, which it is not, however that is for another conversation.
TESLA DEMAND SPIKES WHEN MEASURED BY WEB TRAFFIC TO THE CHECKOUT PAGE.
According to Similarweb's analysis of converted visits, there was a significant increase in conversions during January (with Model Y conversions up 440%) and February (with Model Y conversions up 254% and Model 3 conversions up 43%) compared to the same period in the previous year.
This suggests that Tesla's decision to reduce prices and reintroduce vehicle tax credits has had a positive impact on demand at the beginning of the year. Will this last? That is the trillion dollar question.
ZILLOW HITS 262 MILLION VISITS IN FEBRUARY. ECHOING WHAT SOME ARE SUGGESTING A TROUGH IN HOUSING AFTER THE RATE “SHOCK”
Zillow remains the go-to resource for individuals seeking their next home, and as investors, we closely monitor its performance. In February, Zillow recorded a staggering 262 million visits, solidifying its position as one of the most significant internet assets globally (and we're not exaggerating). Compared to 17 of its peers, Zillow gained a 2% share year over year during the month. When combined with Trulia and Streeteasy, Zillow Group commands a 52% market share of traffic in its category, making it the clear industry leader. In total, the top 10 sites account for 98% of traffic share. Zillow's gains came at the expense of Realtor.com, which lost 3% share. Overall, this is a positive development for the housing market and, consequently, the foundation of the economy.
Disclaimer: Not a recommendation to purchase or sell any securities mentioned. This is for educational purposes only.