Carrier Global Gives Clues on Housing, Data Center Demand
August CPI report expected to land today and could sway rate-cut expectations.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
We get the next part of this week’s August inflation data – the consumer price index - at 8:30 a.m. today. The headline figure is expected to move up to 2.9% on a year-over-year basis, with the core figure holding steady at 3.1%. Following yesterday’s surprise drop in the August producer price index data, should we see a similar surprise in the year-over-year figures or a negative print for the sequential ones, we’ll see rate-cut expectations inch up further.
Based on comments from retailers and others who are restocking inventories with tariffs in place, we’d be surprised if we see a repeat of what we saw yesterday, but our policy is to let the data talk to us.
Connecting Dots from Carrier Global
Last week’s disappointing August employment report led mortgage rates to fall. That was likely exacerbated by the dramatic revisions in jobs data for the 12 months ending March 2025 and yesterday’s surprise producer price index print. Bankrate currently shows the national average for a 30-year fixed mortgage at 6.53%, down from ~6.9% in May and much more from the 7.9% peak back in October 2023.
Earlier this week, we discussed how that movement led housing-related stocks to move higher, but in that alert, we questioned demand strength for new housing. We laid out what we would be focusing on to look for a potential turn up in demand, but connecting the dots, comments from HVAC company Carrier Global CARR reaffirm our staying on the sidelines for now.
At the Morgan Stanley conference, Carrier warned of a steep HVAC slump, calling out a much stronger-than-expected slide in the North American residential market. Carrier now sees those volumes down more than 40% year over year compared to its prior guidance for a 15% drop. For context, that would represent the weakest September quarter volume from that market in more than a decade.
Again, that will keep us on the sidelines when it comes to housing-related plays for now.
But Carrier also gave a data point that confirmed for our data center plays, especially United Rentals URI and Eaton ETN. Carrier’s data center business is tracking to hit $1 billion in sales this year, two times what it was in 2024, with growth rates expected to remain above 25% in the coming quarters.
The Pro Portfolio is long URI, ETN.
