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Even though U.S. homebuilder sentiment did inch up in the month of April, sparse credit conditions for buyers and a lack of supply for building properties and labor continue to drag down industry fundamental.

(Photo: REUTERS)

U.S. homebuilder sentiment declined for a third straight month in March, according to a report from the National Association of Home Builders Monday. The NAHB/Wells Fargo Housing Market index fell two points to 53 from the month prior, the group said in a statement.

Economists polled by Reuters had forecast the index would edge up to 56.

“Even with this slight slip, the HMI remains in positive territory and we expect the market to improve as we enter the spring buying season,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.

Readings above 50 mean more builders view market conditions as favorable than poor. But the index, which has not been below 50 since June 2014, still showed more builders view market conditions as favorable.

“The drop in builder confidence is largely attributable to supply chain issues, such as lot and labor shortages as well as tight underwriting standards,” NAHB Chief Economist David Crowe said in a statement. “These obstacles notwithstanding, we are expecting solid gains in the housing market this year, buoyed by sustained job growth, low mortgage interest rates and pent-up demand.”

However, two of the three HMI components posted losses in March.

The single-family home sales component dropped three points to 58,marking the second straight drop in the subindex. The gauge of single-family sales expectations for the next six months was flat at 59, while prospective buyer traffic slipped to 37 from 39, marking a third straight monthly decline.

U.S. homebuilder sentiment declined for a third

isaac-herzog-benjamin-netanyahu

An election campaign billboard shifts between images of Israel’s Labor Party leader Isaac Herzog, left, and Likud Party leader and Israeli Prime Minister Benjamin Netanyahu in Tel Aviv on Sunday, March 15, 2015. (Oded Balilty/AP)

Final Israeli election polls show Prime Minister Benjamin Netanyahu’s Likud party projected to win 4 seats fewer than the Zionist Union, headed up by Isaac Herzog and Tzipi Livini. Israeli law forbids media outlets from publishing further polling results prior to the election and, when averaged, Herzog’s leftist Zionist Union party is projected to win 25 seats juxtaposed to 21 for Netanyahu’s Likud party.

israeli election polls

Final average of Israeli election poll. Source: Haaretz

 

Polls Vs. Process

UPDATE: Internal Lukud party polls shared with PPD show for the first time a majority of Israelis do not believe Netanyahu will form the next government. On March 9, Likud’s data showed that 62.3 percent thought Netanyahu would form the coalition and 19.9 percent thought that Herzog and Livni would form the government. But on Monday, for the first time, the number believing Netanyahu would form the government fell to 49.6 percent, while 30.4 percent thought Herzog would form the coalition.

Though the polling trend shows a small but steady lead for the leftist challengers, neither Likud nor the Zionist Union will garner anywhere near the 61-seat majority of the 120-seat Parliament required to outright form a government. The real question is whether it will be Netanyahu or Herzog who will persuade enough third-party support to form a coalition that puts them at at least 61 votes.

That candidate will earn the approval of Israeli President Reuvin Rivlin, himself a Likud party member.

Netanyahu has been here before, sort of.  In 2009, Livni, then the leader of the centrist Kadima party, won 28 seats to Likud’s 27. Yet, Netanyahu formed a majority coalition with his natural third-party allies. These built-in advantages again favor the prime minister, as he can tap smaller rightist and ultra-Orthodox parties for support.

The polling projections and election dynamics are similar, as Shas and United Torah Judaism have both allied with Netanyahu in the past and are likely to do so again, along with a newly-formed Orthodox splinter faction, Yahad. The polling average projects Shas to win 8 seats; the United Torah 7 seats; and, 4 seats for Yahad.

However, no record-setting prime minister serves for as long as Netanyahu without making political enemies, which will work in Herzog’s favor. Yesh Atid, a so-called centrist party that became the second largest faction in the Knesset following the 2013 elections, has gained some momentum back after an early tanking in the polls. It is far easier to see them align with the Zionist Union considering the party leader. Yair Lapid was fired from the post of finance minister in Netanyahu’s outgoing government.

Yesh Atid could add some 13 seats to a Herzog-led governing coalition that will also consist of members of Meretz, a small leftist party. The party’s potential voter base has opted instead for the Zionist Union, and Meretz leadership has said it will support Herzog for prime minister.

Moshe Kahlon, also a former Likud party member, is another likely key player in the race to form a coalition. Kahlon’s new center-right party, Kulanu, is projected by the average of polls to win 9 seats. Kahlon, who is a former communications minister, gained widespread popularity among Israelis of all political stripes when he brought the principles of a free and fair market to Israel’s cellphone sector. He opened up the market to competition, which led to a bottoming out of mobile per-minute rates.

Polling shows his promises to break up more monopolies are attractive to moderate, former Likud voters who are strong on security but disappointed by Netanyahu’s economic record. Kahlon has not said whether he will endorse Netanyahu or Herzog for prime minister after the election, but his support likely will be a critical key to the forming of a majority.

The Backstory

Make no mistake, a Likud loss or even a narrow win would no doubt be a significant development in a country where the electorate has been moving steadily rightward over the past 15 years. Benjamin Netanyahu enjoyed high approval numbers over the summer for his handling of the latest Israeli-Palestinian conflict. In fact, despite the closeness of the parliamentary race, the last poll found Israelis still prefer him as prime minister over Herzog.

How did it come to this? Well, that depends who you are asking? Interestingly, an element of the truth is found in each of their statements.

Netanyahu said Sunday that, because of anti-Israeli media and a behind-the-scenes effort by “foreign powers,” there “is a real danger that a leftist government will come to power.”

This is a charge that certainly has merit.

In large part due to the help of President Obama’s political operatives, the Israeli election has turned on economic issues rather than security issues. For the first time in its history, social welfare and other economic arguments have taken the place of Iran, Hezbollah, Hamas, and whether Palestinians will make good on their threat to cut off security ties with Israel. The last polls for Israel Army Radio found that more than half of Israelis surveyed plan to vote based on social and economic issues and that fewer than 1 in 3 put security at the top of their concerns. Nine of 10 respondents said the cost of living would influence their choice.

PPD has learned that a bipartisan Senate committee has been established to investigate the Obama administration’s use of several taxpayer-funded State Department grants to support OneVoice, a U.S.-based leftist activist organization started by five Democrats. OneVoice received two taxpayer-funded grants from the U.S. State Department in the past year totaling $200,000 and, as PPD previously reported, joined forces with the group V15 – who has a reputed mission of “anyone but Bibi” – to defeat Netanyahu. V15 is run by Jeremy Bird, known for his role as Obama’s 2012 field director.

“All the media and all the NGOs are out to overthrow the right,” Naftali Bennett, economy minister and leader of the Jewish Home Party told students at Bar-Ilan University outside Tel Aviv. “I’ve never seen such a concentrated effort, with money from abroad.”

While the committee will be digging through documents, the evidence is indeed anecdotally evident from the campaign messages of the Zionist Union.

“The citizens of Israel will replace Netanyahu, not because of what is written in the newspapers,” Livni, a longtime Netanyahu rival and the former justice minister said Sunday, “but because they don’t have enough money to buy a newspaper or buy apartments for their children.”

Future Of Israeli Policy

The significance of the Arab Joint List, including the Israeli Arab parties Balad, Hadash, Ta’al, the United Arab List, and members of the Islamic Movement — cannot be understated. Previously, these smaller factions refused to join forces, but Avigdor Lieberman’s push to raise the voting threshold parties must reach to sit in the Israeli Knesset, gave energy to the politically strategic plan. Ironically, Lieberman’s own Yisrael Beiteinu party now faces the possibility of not making the four-seat threshold required to enter Parliament following a series of ethics investigations.

The average of polls show the Arab Joint List winning 13 seats, but the party’s leader, Ayman Odeh, repeatedly vowed not to sit in any government led by Netanyahu or Herzog, which means that they will sit in the opposition and, if so, will be the first Arab party to be given several intelligence briefings by Israel Defense Forces personnel. Politicians in both right-wing and centrist parties are extremely concerned about what the Arab Joint List would do with this classified information.

This possibility has also led to Egyptian officials privately expressing concerns to current coalition members. Security competition between Israel and Egypt is at an all-time high, and as long as President Abdel Fattah el-Sisi remains the head of the largest Arab nation, anything less than a Netanyahu-led government will present the potential of reversing those gains. A Herzog-led government will cave to the Obama administration on Iran, which will undoubtedly strain relations between Israel and Cairo, as well as Saudi Arabia.

Palestinian President Mahmoud Abbas injected himself into the Israeli election recently, publicly stating that a decision to cut security ties with Israel won’t be made until after the election. Given the history between Livni and Abbas (she met with the Fatah leader in London without authorization from Netanyahu), it is fair to say the issue of Israeli settlements will be back on the table in order to work out a deal on security cooperation if Herzog becomes prime minister.

Final Thoughts

Ultimately, it is important to remember that people vote, not polls. And anyone who claims to know exactly how this election will end or who will in the end be successful in forming a governing coalition, is kidding themselves and hoping to kid you.

It is possible that neither Herzog nor Netanyahu manage a majority coalition, forcing them to join forces to form a unity government. It is even possible to see them alternate two-year terms as prime minister, though it would no doubt be a less-than-ideal for either men. Netanyahu certainly isn’t willing to concede to such an arrangement if he doesn’t have to, and is focusing on rallying his base until the end.

“This is a fateful struggle,” Netanyahu said. “We can close this gap.”

An analysis of the final Israeli election

empire state manufacturing index

Readings from the Empire State manufacturing index reported by the New York Fed monthly.

Manufacturing activity growth in New York State slowed in March for a second month, as the pace of new orders contracted to its weakest level since November 2013,

The New York Federal Reserve’s Empire State Manufacturing Survey released Monday found general business conditions fell to 6.90 in March from February’s 7.78. Economists polled by Reuters had expected a reading of 8.0 this month, but any reading above zero still indicates expansion.

However, the new orders index dropped to -2.39 in March from 1.22 in February, while the prices paid index fell two points down to 12.37 from prior month’s 14.61. January’s prices paid was the highest reading since September.

The pace of growth in employment rose to 18.56, which was the strongest reading since May 2014, and up from 10.11 in February.

The index of business conditions six months ahead bounced up to 30.72 from 25.58 in February, though the shipments index fell six points to 7.9, and the unfilled orders index fell seven points to -13.4. The delivery time index fell to -2.0, suggesting slightly shorter delivery times. The inventories index fell to -5.1, signaling that inventory levels were lower.

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.

The New York Federal Reserve's Empire State

Hilllary Clinton Speaks at Emily's List Conference

Former U.S. Secretary of State Hillary Clinton speaks at the 30th Anniversary National Conference of Emily’s List in Washington, D.C. on March 3, 2015. (Photo: Brooks Kraft/Corbis)

Hillary Clinton’s camp issued what they called clarification late Sunday addressing the steps they claim were taken to review thousands of personal emails before they were deleted. It what is a stunning change in their story, the Clinton team is now claiming they individually read “every email” before deleting those they deemed themselves to be private.

Clinton spokesman Nick Merrill issued a written statement to Fox News in response to revelations the former secretary of state used a private email account and server while serving up President Obama. Her office claimed last week that while more than 30,000 “work-related” emails were turned over to the State Department, nearly 32,000 were deemed “private” and deleted.

Merrill on Sunday clarified an earlier fact sheet handed out to media, which first claimed every email was not read.

“We simply took for granted that reading every single email came across as the most important, fundamental and exhaustive step that was performed. The fact sheet should have been clearer in stating that every email was read,” Merrill said.

Clinton tried to put EmailGate behind her and her expected 2016 campaign, but a quick press conference and excuses of convenience did not satisfy the critics or media. This latest assurance that “every email” was read before being either deleted or turned over to the State Department is not likely to silence those voices, either.

“I have zero interest in looking at her personal emails,” Rep. Trey Gowdy, R-S.C., the chairman of the House Select Committee on Benghazi said on Fox News Sunday with Chris Wallace.

“But who gets to decide what’s personal and what’s public? And if it’s a mixed-use email, and lots of the emails we get in life are both personal and work, I just can’t trust her lawyers to make the determination that the public’s getting everything they’re entitled to.”

The story from the Clinton camp regarding

Rep. Trey Gowdy, R-S.C., the chairman of the House Select Committee on Benghazi, told Chris Wallace that Hillary Clinton and her aides did not have the right to “decide what’s personal and what’s public.”

Clinton hoped to put EmailGate behind her and her expected 2016 campaign, but the quick press conference did not satisfy the critics and media. But the former secretary of state told reporters she would not willingly hand over the server even to an independent investigator.

When asked if he thought the House of Representatives should issue a subpoena to force Clinton to hand over the server for investigation, Gowdy said he hopes “it doesn’t get to that point.”

“It’s an open legal question and any time you litigate something you’re talking about years and years,” Chairman Gowdy said. “I think an imminently reasonable alternative is for her to turn over that server to an independent, neutral third party.”

“But who gets to decide what’s personal and what’s public?” Gowdy noted “And if it’s a mixed-use e-mail and lots of e-mails we get in life are both personal and some work, I just can’t trust her lawyers to make the determination that the public is getting everything they’re entitled to.”

Rep. Trey Gowdy, R-S.C., the chairman of

In an advertisement for Israeli Prime Minister Benjamin Netanyahu, who is seeking another term as head of government, actor Jon Voight implores Israelis to re-elect Netanyahu. Voight also explains that those like Herzog who believe that deal making is the solution to Israel’s problems is as wrong as Neville Chamberlain.

Voight said that President Obama, who has been actively working to unseat Prime Minister Netanyahu, “does not love Israel,” but rather seeks “to control Israel.”

“I love Israel,” Voight said. “I want to see Israel survive and not be overtaken by the madmen of this world. President Obama does not love Israel. His whole agenda is to control Israel, and this way, he can be friends with all of Israel’s enemies.”

As PPD reported in late January, a team of Democrats with ties to the White House touched down in the Jewish nation months ago, ready to work on an Israeli election campaign in support of Herzog.

VOIGHT: I love Israel. I want to see Israel survive and not be overtaken by the madmen of this world. President Obama does not love Israel. His whole agenda is to control Israel, and this way, he can be friends with all of Israel’s enemies. He doesn’t want Bibi Netanyahu to win this election. America has not been the same since his presidency. I beg everyone, all of you, to understand the truth.

Those like Isaac Herzog (Netanyahu’s challenger) who believe that dealmaking is the solution to what Israel faces are as wrong as Neville Chamberlain believing he made a peace deal with Hitler. We must learn from history where the true danger lies. I pray to God to keep Israel safe, and America as well.

In an ad for Israeli Prime Minister

St. Louis County District  Attorney Robert McCulloch speaks at a press conference in Clayton

St. Louis County District Attorney Robert McCulloch speaks at a press conference about an arrest in connection with the shooting at the Ferguson Police Department last Thursday night that left two police officers wounded, in Clayton, Missouri, March 15, 2015. REUTERS/Kate Munsch

Jeffrey Williams, 20, was arrested Saturday night and charged in the shooting of two St. Louis County police officers Thursday, county officials announced Sunday. St. Louis County Prosecuting Attorney Robert McCulloch said during the afternoon press conference that Williams faces two counts of assault in the first degree, three counts of armed criminal action and firing a weapon from a vehicle.

St. Louis County Police Chief Jon Belmar told reporters last week at a news conference that a 41-year-old officer from St. Louis County was shot in the shoulder around midnight local time, while a 32-year-old officer from Webster Groves, a St. Louis suburb, was shot in the face. Both victims were taken to a local hospital and subsequently released.

Williams, who is currently being held on $300,000 cash bond, attended several demonstrations in Ferguson, Mo., since the justified shooting of Michael Brown. He told police that he fired shots at someone he had a dispute with, and accidentally hit the officers. McCulloch said his story is being investigated, but the .40-caliber handgun that matches the shell casings recovered at the scene of the officers’ shootings was found in Williams’ residence, which police searched after obtaining a warrant based on information received from the public.

Jeffrey Williams, 20, was arrested Saturday night

NYSE-markets-economic-data

Traders digest economic news and data from the week’s economic calendar on the floor of the New York Stock Exchange (NYSE). (Photo: Reuters)

Investors will be eyeing the Federal Open Market Committee (FOMC) meetings Tuesday and Wednesday, eagerly awaiting a subsequent interest rate policy statement. New policy initiatives, if any, will be announced in a statement at or around Wednesday at 2 p.m. ET, just prior to Fed Chair Janet Yellen’s scheduled press conference at 2:30 P.M. ET.

All eyes will focus on whether the word “patient” is removed from the statement regarding the Fed’s decision on the timing of raising interest rates. If it’s removed, markets can be reasonably conclude that the central bank will move forward with its anticipated plan to raise interest rates later this year, more precisely in mid June.

The Fed added the obscure word “patient” in December to signal markets and investors that FOMC policymakers were not yet ready to raise interest rates. Unfortunately, the move will make borrowing money more expensive and could upset several sectors of the economy, which have all seen a tepid recovery. However, at the same time, the Fed understands that holding interest rates at zero will inevitably do yet-to-be determined damage.

Most analysts believe the Fed won’t announce a rate hike until the word “patient” is removed from the statement, which is expected to happen this week. The rate hike announcement will come at the Fed’s June meeting and the hike going into effect in July.

Fed officials – particularly Yellen – have not suggested to investors and watchers that the rate hike isn’t coming at the expected time, though the central banks target inflation rate and wage growth estimates have stubbornly missed the mark.

In a report released Friday, the Labor Department said the producer price index for final demand fell 0.5 percent after dropping 0.8 percent in January. It marked the fourth straight months of declines in the so-called PPI, starting rumors that inflation pressures may delay an anticipated June interest rate increase from the Fed.

Wages, regardless of an alleged tightening in the labor market, have not only failed to make the Fed’s target, but have completely fizzled. Despite weekly jobless claims falling more than expected last week, the 4-week rolling average still remains above 300,000.

Other economic data scheduled for release next week includes a manufacturing sector report on industrial production, which is due out Monday, and a housing starts report due out Tuesday.

Investors will be eyeing the Federal Open

producer prices and Ford factory worker

Producer prices reported by the Labor Department. A Ford Factory worker on the assembly line. (Photo: REUTERS)

U.S. producer prices unexpectedly fell in February, indicating inflation pressures may delay an anticipated June interest rate increase from the Federal Reserve. In a report released Friday, the Labor Department said the producer price index for final demand fell 0.5 percent after dropping 0.8 percent in January.

While it was the fourth straight monthly decline in the so-called PPI, the prior 12 months through February have seen producer prices fall by 0.6 percent. It marks the first drop since the series was revamped in 2009, though it was unchanged in January.

The results missed the consensus mark, as economists polled by Reuters had forecast the PPI rising 0.3 percent last month and remaining unchanged from a year ago.

The decline in producer inflation came despite a stabilization in energy prices, which had weighed on price pressures in recent months. The dollar’s strength against the currencies of the main U.S. trading partners is helping to hold down inflation, but the Fed’s target rate is still far off.

Lower-than-expected inflation could prompt the Fed to delay a much-needed raising of interest rates until much later this year. While some cite a tightening labor market, wages and inflation have been far off the needed target to reflect a healthy economy. Particularly regarding the housing market, many are beginning to fear that a slight rise in rates may topple the otherwise abysmal gains made by the sector.

The volatile trade services component, which mostly reflects profit margins, fell by a record 1.5 percent in February after rising 0.5 percent in January. It was weighed down considerably by a severe 13.4 percent drop in profit margins at gasoline service stations.

A key measure of underlying producer price pressures — which excludes food, energy and trade services — was unchanged after a record 0.3 percent drop in January.

All eyes this week will be on the Federal Open Markets Committee (FOMC), as Fed Chair Janet Yellen is looking for a reason to remain dovish. The March 18 FOMC meeting and Yellen press conference to follow is marked on economic calendars across the global market, as is the “dots” forecast, the labor market, the strength of the U.S. dollar, Eurozone sovereign yields, inflation, disinflation or deflation.

“Yet, the big issue – the center ring attraction – will be the potential removal of the word “patient” from Yellen’s guidance strategy,” said Larry Shover, a former derivatives trader turned portfolio fund manager. “Never has a word received so much attention and moved me to thinking about, not only why consensus is so stuck on the word but rather, what she could possibly replace it with.”

The Fed added the obscure word “patient” in December to signal markets and investors that FOMC policymakers were not yet ready to raise interest rates. Unfortunately, the move will make borrowing money more expensive and could upset several sectors of the economy, which have all seen a tepid recovery. However, at the same time, the Fed understands that holding interest rates at zero will inevitably do yet-to-be determined damage.

U.S. producer prices unexpectedly fell in February

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