Economic Update 03/27/17

NEW HOME SALES GO ONE WAY, RESALES ANOTHER

Rising 6.1% in February, new home sales reached a 7-month peak. The Census Bureau said that this gain occurred with just 5.4 months of inventory on the market, less than half that available in 2006 during the height of the last residential real estate boom. In contrast, the National Association of Realtors reported a 3.7% retreat for existing home sales last month, with increasing mortgage rates, high prices, and limited supply as major factors.     

A GAIN FOR DURABLE GOODS ORDERS

A Census Bureau report noted a 1.7% improvement in February, following January’s 2.3% advance. Core hard goods orders did retreat 0.1% last month.    

LIGHT SWEET CRUDE BREAKS 4-DAY LOSING STREAK

Friday’s small gain in the price of oil marked the first daily advance for the commodity since March 17. Across March 20-24, crude prices declined 1.7% as news broke of record stockpiles; it was the third losing week for oil in the past month. WTI crude settled at a NYMEX price of $47.97 Friday.

VOLATILITY RETURNS, MAJOR INDICES DECLINE

Investors were less confident last week than they had been in some time. Across five trading days, the Dow Jones Industrial Average fell 1.52% to 20,596.72; the Nasdaq Composite, 1.22% to 5,828.74; and the S&P 500, 1.44% to 2,343.98. The CBOE VIX gained 14.89% for the week, which still left it down 7.69% for the year.

 

THIS WEEK: Monday, nothing major is scheduled. Tuesday, Federal Reserve chair Janet Yellen speaks at an economic development conference in Washington, D.C., the Conference Board releases its March consumer confidence index, the January S&P/Case-Shiller home price index arrives, and in addition, Wall Street will look at earnings from Carnival, Darden Restaurants, and Sonic. On Wednesday, U.K. prime minister Theresa May is expected to officially trigger Article 50 of the Lisbon Treaty, formally beginning the Brexit; stateside, the NAR issues its February pending home sales report, complementing earnings news from Lululemon Athletica and Paychex. Thursday brings both a new initial jobless claims report and the third estimate of Q4 growth from the federal government, along with Q4 results from Dell Technologies. Friday offers the University of Michigan’s final March consumer sentiment index, February consumer spending figures, and the latest PCE price index.

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