Earnings season kicked off last week with bank earnings. Net interest income trends mixed with a decline at Wells Fargo and a slight gain at Citibank, while JP Morgan raised it’s FY NII forecast slightly. However, all three saw funding costs rise by ~100 bp or more. Outside of banks, Delta Airlines beat and guided Q2 ahead, with analysts positive on demand trends and and improving corporate travel environment.
The Volatility index spiked to a 5 month high last week on higher for longer and Middle East unrest. I suspect we will be hearing more about the VIX in the near future. As a reminder, The VIX is calculated to derive expected volatility by averaging the weighted prices of out-of-the-money puts and calls. –
Essentially, the delta between a short term option and a near term option. The VIX is interpreted as annualized implied volatility of a hypothetical option on the S&P500 stock index with 30 days to expiration. A reading of 20% would expect a 20% move, up or down, in the next 12 months.
US equities were lower as the S&P 500 finished down for a second-straight week, while the Nasdaq capped off a third-straight weekly decline (and fifth in past six weeks). Some of the worst performers included moneycenter banks, foreign banks, investment banks, homebuilders, housing-linked retail, cruise lines, casinos, apparel manufacturers, media and telecom, and drug stores. Big tech mostly higher (TSLA +3.7%, AAPL +4.1%).
There were few pockets outright higher this week, though outperformers included industrial metals and precious metals miners, oil majors, waste, discounters, and beauty. Treasuries were weaker with some curve flattening, with the 2Y yield up ~13 bp for the week and the 10Y up ~10 bp. The dollar index was up 1.6%, the best weekly performance since Sep-22. Gold finished the week up 1.2%. Bitcoin futures were down 1.6%. WTI crude was down 1.4%
The biggest story of the week revolved around Inflation data. March core CPI (ex-food and energy) rose 0.4% m/m, hotter than the 0.3% estimate, while the core 3m annualized pace of 4.53% was the highest since May-23. Some economists said the report confirmed a reacceleration of CPI, cutting down the argument that the January and February prints were the result of seasonal effects, and adds to risk of high Fed policy for longer.
Friday’s April preliminary Michigan Consumer Sentiment also missed, coming off last month’s print that was a near-three year high, though 1Y inflation expectations rose 0.2pp to 3.1%, while 5-10Y expectations also rose to 3%, a five month high. However, Thursday’s March PPI print showed core PPI down 0.2pp to 0.2% m/m, in line with expectations, while headline fell 0.4pp from February to 0.2%, below 0.3% consensus.
Following CPI, the odds of a June Fed rate cut fell to around 20% from 60% a week prior, while the December median fed funds rate of around 4.97% suggests only ~40 bp of cuts by year end. New York Fed President Williams said Thursday he sees no need to change policy in the very near term, and also raised his PCE forecast for this year to 2.25-2.5%, up from 2-2.25% as of the end of February.
However, some economists said the hotter CPI report may not have as much of an impact on PCE, with some arguing that components from this week’s cooler PPI report could suggest PCE at a more comfortable 0.2% for March.
The CPI print also helped accelerate the recent backup in yields, with the policy-sensitive 2Y yield touching 5% earlier this week, the highest since November, while the 10Y yield rose above 4.50% for the first time since November. Pressure on rates were also amplified by a series of weak auctions (3Y, 10Y, and 30Y), putting supply fears back into focus.
While equities have proven resilient against higher rates so far this year, a number of strategists flagged growing headwinds from yields, which are nearing levels that could trigger equity weakness. However, Treasuries ended the week well of worst levels after a Friday flight-to-safety rally amid the latest potential escalation between Israel and Iran.
Beyond inflation. rates, and the latest ramp in geopolitical tensions, other pieces of the bearish narrative include commodity inflation, stretched systematic long positioning, dampened buyback support from blackouts into earnings season, some cautious takeaways from bank earnings, and signaling from this week’s NFIB small business index, with optimism the lowest since 2012 and more signs of softer demand.
However, several pieces of the bullish arguments remain in tact, particularly early earnings season takeaways that suggest a firmer macro backdrop and strong early beat rates. Despite some hawkish Fedspeak, officials also continued to forecast rate cuts starting this year. And even though Treasury yields sit near YTD highs, some analysts noted rates still have more room to rise before becoming a headwind to stocks.
Some also continue to point out the recent backup in rates is due to broader economic strength and more support for the no landing narrative, rather than weakening economic fundamentals. The AI proliferation narrative also continues to propel momentum and growth performance, which has remained supportive to the broader market.
In addition to earnings this week we get important data and reports on: March retail sales, March housing starts and building permits, April Philly Fed index , and March existing home sales.
The Baker Hughes rig count was down 3 this week. There are 617 oil and gas rigs operating in the US – Down 131 from last year.
Metals Complex
Employment Picture
Weekly Unemployment Claims – Released Thursday 4/11/2024 – In the week ending April 6, the advance figure for seasonally adjusted initial claims was 221,000 a decrease of 11,000 from the previous week’s revised level. The 4-week moving average was 214,250 a decrease of 250 from the previous week’s revised average.
February Jobs Report – BLS Summary– Released 4/5/2024 – The US Economyadded 303k nonfarm jobs in March and the Unemployment rate decreased 0.1% to 3.8%. Average hourly earnings increased 12 cents to $34.69. Hiring highlights include +72k Healthcare, +71k Government, +49k Leisure and Hospitality, and +39k Construction.
Average hourly earnings increased 12 cents/0.3% to $34.69.
U3 unemployment rate decreased 0.1% to 3.8%. U6 unemployment rate was unchanged at 7.3%.
The labor force participation rate was little changed at 62.7%.
Average work week increased 0.1 to 34.4 hours.
Job Openings & Labor Turnover Survey JOLTS – Released 4/2/2024 – The number of job openings changed little at 8.8 million on the last business day of February, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed 5.8 million and 5.6 million, respectively. Within separations, quits (3.5 million) and discharges (1.7 million) changed little.
Employment Cost Index –Released 1/31/2024 – Compensation costs for civilian workers increased 0.9% for the 3-month period ending in December 2023. The 12-month period ending in December 2023 saw compensation costs increase by 4.2. The 12-month period ending December 2022 increased 5.1%. Wages and salaries increased 4.3 percent over the 12-month December 2023 and increased 5.1 percent for the 12-month period ending in December 2022. Benefit costs increased 3.8 percent over the 12-month period ending December 2023 and increased 4.9 percent for the 12-month period ending in December 2022. This report is published quarterly.
This Week’s Economic Data- Blue links take you to data source
Producer Price Index – Released 4/11/2024– The Producer Price Index for final demand increased 0.2 percent in March, seasonally adjusted. Final demand increased 0.6 percent in February. On an unadjusted basis, the index for final demand moved up 2.1 percent for the 12 months ended in March.
Consumer Price Index –Released 4/10/2024– The Consumer Price Index for All Urban Consumers increased 0.4 percent in March on a seasonally adjusted basis, after increasing 0.4 percent in February. Over the last 12 months, the all items index increased 3.5 percent before seasonal adjustment.
Recent Economic Data – Blue Links bring you to data source
Consumer Credit –Released 4/5/2024– Consumer credit increased at a seasonally adjusted annual rate of 3.4 percent in February. Revolving credit increased at an annual rate of 10.2 percent, while nonrevolving credit increased at an annual rate of 0.9 percent.
U.S. Trade Balance – Released 4/4/2024 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $68.9 billion in February, up $1.3 billion from $67.6 billion in January. February exports were $263.0 billion, $5.8 billion more than January exports. February imports were $331.9 billion, $7.1 billion more than January imports. The February increase in the goods and services deficit reflected an decrease in the goods deficit of $0.3 billion to $91.4 billion and a decrease in the services surplus of $1.6 billion to $22.5 billion.
PMI Non-Manufacturing Index – Released 4/3/2024 – Economic activity in the services sector expanded in March for the 15th consecutive month as the Services PMI® registered 51.4 percent, 1.2 percentage points lower than February’s reading of 52.6 percent.
U.S. Construction Spending– Released 4/1/2024 – Construction spending during February 2024 was estimated at a seasonally adjusted annual rate of $2,091.5 billion, 0.3 percent below the revised January estimate of $2,096.9 billion. The February figure is 10.7 percent above the February 2023 estimate of $1,889.6 billion.
PMI Manufacturing Index – Released 4/1/2024 – The March Manufacturing PMI registered 50.3 percent, up 2.5 percent from February. The manufacturing sector expanded in March following 16 consecutive months of contraction. The overall economy continued in expansion for the 47th month after one month of contraction in April 2020.The New Orders Index moved back into expansion territory at 51.4 percent, 2.2 percentage points higher than the figure of 49.2 percent recorded in February. The Production Index reading of 54.6 percent is a 6.2-percentage point increase compared to February’s figure of 48.4 percent.
US Light Vehicle Sales– Released 3/29/2024 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 15.795 million units in February.
Chicago PMI– Released 3/29/2024 – Chicago PMI remained in contraction territory in March declining to 41.4 points down from 44.0 points in February. The latest reading indicated that Chicago’s economic activity contracted for the fourth consecutive month in March, and the lowest level in the past ten months.
Personal Income – Released 3/29/2024 – Personal income increased $66.5 billion (0.3 percent at a monthly rate) in February. Disposable personal income (DPI) increased $50.3 billion (0.2 percent). Personal consumption expenditures (PCE) increased $145.5 billion (0.8 percent).
Third Estimate of 4th Quarter 2023 GDP – Released 3/28/2024 – Real gross domestic product (GDP) surpassed expectations and increased at an annual rate of 3.4 percent in the fourth quarter of 2023, according to the “third” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.9 percent. The GDP “third” estimate is based on source data that are more complete than that released in the “second” and “advance” estimates. The update primarily reflected upward revisions to consumer spending and nonresidential fixed investment that were partly offset by a downward revision to private inventory investment. The increase in real GDP primarily reflected increases in consumer spending, state and local government spending, exports, nonresidential fixed investment, federal government spending, and residential fixed investment that were partly offset by a decrease in private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.
Durable Goods – Released 3/26/2024 – New orders for manufactured durable goods in February, up following two months of decline, increased $3.7 billion or 1.4 percent to $277.9 billion, the U.S. Census Bureau announced today. This followed a 6.9 percent January decrease. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders increased 2.2 percent. Transportation equipment, also up following two months of decline, led the increase, $2.9 billion or 3.3 percent to $90.4 billion.
Consumer Confidence – Released 3/26/2024 – Consumer Confidence decreased in March, essentially unchanged from February. Expectations decreased from 76.3 to 73.8. Consumers’ assessment of the present situation improved in March, but they also became more pessimistic about the future. Consumers remained concerned with elevated price levels especially in concerns about food and gas prices, but in general complaints about gas prices have been trending downward. Recession fears continued to trend downward, but consumers expressed more concern about the US political environment compared to prior months.
New Residential Sales – Released 3/25/2024 – Sales of new single‐family houses in February 2024 were at a seasonally adjusted annual rate of 662,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.3 percent below the revised January rate of 664,000 but is 5.9 percent above the February 2023 estimate of 625,000. The median sales price of new houses sold in February 2024 was $400,500. The average sales price was $485,000. At the end of February, the seasonally adjusted estimate of new homes for sale was 463,000, a supply of 8.4 months at the current sales rate.
Existing Home Sales – Released 3/21/2024 – Existing home sales in February increased 9.5% from January but fell 3.3% year over year. Existing home sales increased to 4.38 million in February seasonally adjusted. The median price of existing homes for sale increased to a record high of $384,500.
Housing Starts–Released 3/19/2024 – February housing starts came in at 1,521,000, 10.7% above the January estimate and is 5.9% above the February 2023 rate. Building permits were 1.9% above the January rate at $1,518,000 and 2.4% above the February 2023 rate.
Industrial Production and Capacity Utilization – Released 3/15/2024 – Industrial production increased 0.1% in February following a 0.5% decline in January. Manufacturing increased 0.8%. Utilities output decreased 7.5%. Mining increased 2.2%. Capacity utilization was unchanged at 78.3% in February, a rate that is 1.3% below its long-run average.
Producer Price Index – Released 3/14/2024– The Producer Price Index for final demand increased 0.6 percent in February, seasonally adjusted. Final demand increased 0.3 percent in January. On an unadjusted basis, the index for final demand moved up 1.6 percent for the 12 months ended in February.
Next week we get data on Retail Sales, Industrial Production and Capacity Utilization, Housing Starts, and Existing Home Sales.
Disclaimer
This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any stock, bond, currency or CFD contract.
Some information contained herein has been obtained from third party sources believed to be reliable, but has not been independently verified by us; its accuracy or completeness is not guaranteed. Our commentary is based on information considered to be reliable, but no representation is made that it is accurate or complete, and should not be relied upon as such.
The views expressed represent the opinions and beliefs at the time of this commentary and are not meant as a market forecast. These views are subject to change at any time based on market or other conditions and Good Life Advisors disclaims any responsibility to update such views. This information may not be relied on as advice or as an indication of trading intent on behalf of any portfolio. Portfolio investments may change at any time.
Economic and performance information referenced is historical and past performance does not guarantee future results. References to future returns are not promises or estimates of actual returns we may achieve, and should not be relied upon.
No investment strategy or risk management process can guarantee returns or eliminate risk in any market environment. Investing in securities involves risk of loss. Stock and Bond prices can decline significantly in response to adverse market conditions, company-specific events, and other domestic and international political and economic developments. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future.
While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Weekly Market Update | Week 15, 2024
Key Takeaways
Earnings season kicked off last week with bank earnings. Net interest income trends mixed with a decline at Wells Fargo and a slight gain at Citibank, while JP Morgan raised it’s FY NII forecast slightly. However, all three saw funding costs rise by ~100 bp or more. Outside of banks, Delta Airlines beat and guided Q2 ahead, with analysts positive on demand trends and and improving corporate travel environment.
The Volatility index spiked to a 5 month high last week on higher for longer and Middle East unrest. I suspect we will be hearing more about the VIX in the near future. As a reminder, The VIX is calculated to derive expected volatility by averaging the weighted prices of out-of-the-money puts and calls. –
Essentially, the delta between a short term option and a near term option. The VIX is interpreted as annualized implied volatility of a hypothetical option on the S&P500 stock index with 30 days to expiration. A reading of 20% would expect a 20% move, up or down, in the next 12 months.
US equities were lower as the S&P 500 finished down for a second-straight week, while the Nasdaq capped off a third-straight weekly decline (and fifth in past six weeks). Some of the worst performers included moneycenter banks, foreign banks, investment banks, homebuilders, housing-linked retail, cruise lines, casinos, apparel manufacturers, media and telecom, and drug stores. Big tech mostly higher (TSLA +3.7%, AAPL +4.1%).
There were few pockets outright higher this week, though outperformers included industrial metals and precious metals miners, oil majors, waste, discounters, and beauty. Treasuries were weaker with some curve flattening, with the 2Y yield up ~13 bp for the week and the 10Y up ~10 bp. The dollar index was up 1.6%, the best weekly performance since Sep-22. Gold finished the week up 1.2%. Bitcoin futures were down 1.6%. WTI crude was down 1.4%
The biggest story of the week revolved around Inflation data. March core CPI (ex-food and energy) rose 0.4% m/m, hotter than the 0.3% estimate, while the core 3m annualized pace of 4.53% was the highest since May-23. Some economists said the report confirmed a reacceleration of CPI, cutting down the argument that the January and February prints were the result of seasonal effects, and adds to risk of high Fed policy for longer.
Friday’s April preliminary Michigan Consumer Sentiment also missed, coming off last month’s print that was a near-three year high, though 1Y inflation expectations rose 0.2pp to 3.1%, while 5-10Y expectations also rose to 3%, a five month high. However, Thursday’s March PPI print showed core PPI down 0.2pp to 0.2% m/m, in line with expectations, while headline fell 0.4pp from February to 0.2%, below 0.3% consensus.
Following CPI, the odds of a June Fed rate cut fell to around 20% from 60% a week prior, while the December median fed funds rate of around 4.97% suggests only ~40 bp of cuts by year end. New York Fed President Williams said Thursday he sees no need to change policy in the very near term, and also raised his PCE forecast for this year to 2.25-2.5%, up from 2-2.25% as of the end of February.
However, some economists said the hotter CPI report may not have as much of an impact on PCE, with some arguing that components from this week’s cooler PPI report could suggest PCE at a more comfortable 0.2% for March.
The CPI print also helped accelerate the recent backup in yields, with the policy-sensitive 2Y yield touching 5% earlier this week, the highest since November, while the 10Y yield rose above 4.50% for the first time since November. Pressure on rates were also amplified by a series of weak auctions (3Y, 10Y, and 30Y), putting supply fears back into focus.
While equities have proven resilient against higher rates so far this year, a number of strategists flagged growing headwinds from yields, which are nearing levels that could trigger equity weakness. However, Treasuries ended the week well of worst levels after a Friday flight-to-safety rally amid the latest potential escalation between Israel and Iran.
Beyond inflation. rates, and the latest ramp in geopolitical tensions, other pieces of the bearish narrative include commodity inflation, stretched systematic long positioning, dampened buyback support from blackouts into earnings season, some cautious takeaways from bank earnings, and signaling from this week’s NFIB small business index, with optimism the lowest since 2012 and more signs of softer demand.
However, several pieces of the bullish arguments remain in tact, particularly early earnings season takeaways that suggest a firmer macro backdrop and strong early beat rates. Despite some hawkish Fedspeak, officials also continued to forecast rate cuts starting this year. And even though Treasury yields sit near YTD highs, some analysts noted rates still have more room to rise before becoming a headwind to stocks.
Some also continue to point out the recent backup in rates is due to broader economic strength and more support for the no landing narrative, rather than weakening economic fundamentals. The AI proliferation narrative also continues to propel momentum and growth performance, which has remained supportive to the broader market.
In addition to earnings this week we get important data and reports on: March retail sales, March housing starts and building permits, April Philly Fed index , and March existing home sales.
Fixed Income
Yield Curve
March FOMC Statement January Minutes Credit, Liquidity and Balance Sheet Federal Reserve Dot Plots
Treasury.gov yields FOMC Policy Normalization Statement Longer- Run Goals Jan 2024
Foreign Exchange Market
Energy Complex
The Baker Hughes rig count was down 3 this week. There are 617 oil and gas rigs operating in the US – Down 131 from last year.
Metals Complex
Employment Picture
Weekly Unemployment Claims – Released Thursday 4/11/2024 – In the week ending April 6, the advance figure for seasonally adjusted initial claims was 221,000 a decrease of 11,000 from the previous week’s revised level. The 4-week moving average was 214,250 a decrease of 250 from the previous week’s revised average.
February Jobs Report – BLS Summary – Released 4/5/2024 – The US Economyadded 303k nonfarm jobs in March and the Unemployment rate decreased 0.1% to 3.8%. Average hourly earnings increased 12 cents to $34.69. Hiring highlights include +72k Healthcare, +71k Government, +49k Leisure and Hospitality, and +39k Construction.
Job Openings & Labor Turnover Survey JOLTS – Released 4/2/2024 – The number of job openings changed little at 8.8 million on the last business day of February, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed 5.8 million and 5.6 million, respectively. Within separations, quits (3.5 million) and discharges (1.7 million) changed little.
Employment Cost Index – Released 1/31/2024 – Compensation costs for civilian workers increased 0.9% for the 3-month period ending in December 2023. The 12-month period ending in December 2023 saw compensation costs increase by 4.2. The 12-month period ending December 2022 increased 5.1%. Wages and salaries increased 4.3 percent over the 12-month December 2023 and increased 5.1 percent for the 12-month period ending in December 2022. Benefit costs increased 3.8 percent over the 12-month period ending December 2023 and increased 4.9 percent for the 12-month period ending in December 2022. This report is published quarterly.
This Week’s Economic Data- Blue links take you to data source
Producer Price Index – Released 4/11/2024 – The Producer Price Index for final demand increased 0.2 percent in March, seasonally adjusted. Final demand increased 0.6 percent in February. On an unadjusted basis, the index for final demand moved up 2.1 percent for the 12 months ended in March.
Consumer Price Index – Released 4/10/2024 – The Consumer Price Index for All Urban Consumers increased 0.4 percent in March on a seasonally adjusted basis, after increasing 0.4 percent in February. Over the last 12 months, the all items index increased 3.5 percent before seasonal adjustment.
Recent Economic Data – Blue Links bring you to data source
Consumer Credit – Released 4/5/2024 – Consumer credit increased at a seasonally adjusted annual rate of 3.4 percent in February. Revolving credit increased at an annual rate of 10.2 percent, while nonrevolving credit increased at an annual rate of 0.9 percent.
U.S. Trade Balance – Released 4/4/2024 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $68.9 billion in February, up $1.3 billion from $67.6 billion in January. February exports were $263.0 billion, $5.8 billion more than January exports. February imports were $331.9 billion, $7.1 billion more than January imports. The February increase in the goods and services deficit reflected an decrease in the goods deficit of $0.3 billion to $91.4 billion and a decrease in the services surplus of $1.6 billion to $22.5 billion.
PMI Non-Manufacturing Index – Released 4/3/2024 – Economic activity in the services sector expanded in March for the 15th consecutive month as the Services PMI® registered 51.4 percent, 1.2 percentage points lower than February’s reading of 52.6 percent.
U.S. Construction Spending– Released 4/1/2024 – Construction spending during February 2024 was estimated at a seasonally adjusted annual rate of $2,091.5 billion, 0.3 percent below the revised January estimate of $2,096.9 billion. The February figure is 10.7 percent above the February 2023 estimate of $1,889.6 billion.
PMI Manufacturing Index – Released 4/1/2024 – The March Manufacturing PMI registered 50.3 percent, up 2.5 percent from February. The manufacturing sector expanded in March following 16 consecutive months of contraction. The overall economy continued in expansion for the 47th month after one month of contraction in April 2020.The New Orders Index moved back into expansion territory at 51.4 percent, 2.2 percentage points higher than the figure of 49.2 percent recorded in February. The Production Index reading of 54.6 percent is a 6.2-percentage point increase compared to February’s figure of 48.4 percent.
US Light Vehicle Sales– Released 3/29/2024 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 15.795 million units in February.
Chicago PMI – Released 3/29/2024 – Chicago PMI remained in contraction territory in March declining to 41.4 points down from 44.0 points in February. The latest reading indicated that Chicago’s economic activity contracted for the fourth consecutive month in March, and the lowest level in the past ten months.
Personal Income – Released 3/29/2024 – Personal income increased $66.5 billion (0.3 percent at a monthly rate) in February. Disposable personal income (DPI) increased $50.3 billion (0.2 percent). Personal consumption expenditures (PCE) increased $145.5 billion (0.8 percent).
Third Estimate of 4th Quarter 2023 GDP – Released 3/28/2024 – Real gross domestic product (GDP) surpassed expectations and increased at an annual rate of 3.4 percent in the fourth quarter of 2023, according to the “third” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.9 percent. The GDP “third” estimate is based on source data that are more complete than that released in the “second” and “advance” estimates. The update primarily reflected upward revisions to consumer spending and nonresidential fixed investment that were partly offset by a downward revision to private inventory investment. The increase in real GDP primarily reflected increases in consumer spending, state and local government spending, exports, nonresidential fixed investment, federal government spending, and residential fixed investment that were partly offset by a decrease in private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.
Durable Goods – Released 3/26/2024 – New orders for manufactured durable goods in February, up following two months of decline, increased $3.7 billion or 1.4 percent to $277.9 billion, the U.S. Census Bureau announced today. This followed a 6.9 percent January decrease. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders increased 2.2 percent. Transportation equipment, also up following two months of decline, led the increase, $2.9 billion or 3.3 percent to $90.4 billion.
Consumer Confidence – Released 3/26/2024 – Consumer Confidence decreased in March, essentially unchanged from February. Expectations decreased from 76.3 to 73.8. Consumers’ assessment of the present situation improved in March, but they also became more pessimistic about the future. Consumers remained concerned with elevated price levels especially in concerns about food and gas prices, but in general complaints about gas prices have been trending downward. Recession fears continued to trend downward, but consumers expressed more concern about the US political environment compared to prior months.
New Residential Sales – Released 3/25/2024 – Sales of new single‐family houses in February 2024 were at a seasonally adjusted annual rate of 662,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.3 percent below the revised January rate of 664,000 but is 5.9 percent above the February 2023 estimate of 625,000. The median sales price of new houses sold in February 2024 was $400,500. The average sales price was $485,000. At the end of February, the seasonally adjusted estimate of new homes for sale was 463,000, a supply of 8.4 months at the current sales rate.
Existing Home Sales – Released 3/21/2024 – Existing home sales in February increased 9.5% from January but fell 3.3% year over year. Existing home sales increased to 4.38 million in February seasonally adjusted. The median price of existing homes for sale increased to a record high of $384,500.
Housing Starts – Released 3/19/2024 – February housing starts came in at 1,521,000, 10.7% above the January estimate and is 5.9% above the February 2023 rate. Building permits were 1.9% above the January rate at $1,518,000 and 2.4% above the February 2023 rate.
Industrial Production and Capacity Utilization – Released 3/15/2024 – Industrial production increased 0.1% in February following a 0.5% decline in January. Manufacturing increased 0.8%. Utilities output decreased 7.5%. Mining increased 2.2%. Capacity utilization was unchanged at 78.3% in February, a rate that is 1.3% below its long-run average.
Producer Price Index – Released 3/14/2024 – The Producer Price Index for final demand increased 0.6 percent in February, seasonally adjusted. Final demand increased 0.3 percent in January. On an unadjusted basis, the index for final demand moved up 1.6 percent for the 12 months ended in February.
Next week we get data on Retail Sales, Industrial Production and Capacity Utilization, Housing Starts, and Existing Home Sales.
Disclaimer
This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any stock, bond, currency or CFD contract.
Some information contained herein has been obtained from third party sources believed to be reliable, but has not been independently verified by us; its accuracy or completeness is not guaranteed. Our commentary is based on information considered to be reliable, but no representation is made that it is accurate or complete, and should not be relied upon as such.
The views expressed represent the opinions and beliefs at the time of this commentary and are not meant as a market forecast. These views are subject to change at any time based on market or other conditions and Good Life Advisors disclaims any responsibility to update such views. This information may not be relied on as advice or as an indication of trading intent on behalf of any portfolio. Portfolio investments may change at any time.
Economic and performance information referenced is historical and past performance does not guarantee future results. References to future returns are not promises or estimates of actual returns we may achieve, and should not be relied upon.
No investment strategy or risk management process can guarantee returns or eliminate risk in any market environment. Investing in securities involves risk of loss. Stock and Bond prices can decline significantly in response to adverse market conditions, company-specific events, and other domestic and international political and economic developments. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future.
While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Data Sources:
Conference Board Economic Indicators Bureau of Economic Analysis (BEA) Congressional Budget Office (CBO) U.S. Bureau of Labor Statistics (BLS) Federal Reserve Economic Data (FRED Charts)
CME Fed Watch U.S. Treasury – Yields U.S. Census Bureau Institute for Supply Management (ISM) Weekly DOL Employment Data BLS Monthly Jobs Report JOLTS All capital in one visualization 2020
US Energy Admn (EIA) BLS Consumer Price Index CPI BLS Producer Price Index PPIAtlanta Fed GDPNOW NY Fed Nowcast GDP US Census Bureau Housing Starts U.S. Energy Admn
Consumer Credit USCB Retail Sales Construction Spending Federal Reserve Dot Plots 2017 NY Empire Index Philadelphia Federal Reserve P/E Ratio Data -Yardeni Research
Technical Analysis Info: Koyfin.com StockCharts.com – Financial Charts Exponential vs Simple Moving Average
Other links: 1973 Arab Oil Embargo Hunt Brothers Silver Asian Contagion Long-Term Capital bailout
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