The stock market craziness has calmed down and investors seem to have taken a little bit of a breather.
- Through the first four trading days of the week, the markets have remained within a narrow range.
- Little major economic news domestically and internationally
- There has been little opportunity for investors to jump on and try to take advantage
Overall the stock market continues to remain in “bull” territory with 5 straight weeks of market gains.
- At this point all the losses that were incurred since the fall of last year and through the beginning of this year have been returned.
Oil prices have been rising and now sit at just under $40 a barrel.
- This is a significant jump from just a few weeks ago where the price for a barrel was as low as $26.00.
- With current oil prices stemming the tide of company bankruptcy’s, investors continue to feel much better about corporate profits which is what is keeping the stock market rally going.
The housing market seems to be lagging behind the growth of other sectors of the economy.
- Existing home sales for the month of February unexpectedly declined by a surprising 7.1 percent.
- The single-family sector of the report represented a significant portion of the decline.
- The biggest contributor to the decline is not the lack of demand, it is the shortage of available inventory.
Current supply of homes available for sale is at 4.4 months.
- Although this is an increase from the prior month’s 4.0 month, this is still far below the 6 month supply level which is considered a healthy balanced market.
- Existing home sales are currently 2.2 percent higher than the same time last year.
- Although inventory is higher, the trend of sales overall may be heading in the wrong direction due to the shortage.
Despite challenges to the housing sector, there are some bright spots.
- The FHFA House Price Index showed home prices continue to rise with an increase of 0.5 percent from December to January.
- Additionally, prices are 6.0 percent higher than the same time last year.
- One of the thoughts on the shortage of inventory is that home owners are holding on to their properties to ride the wave of rising home values.
Finally, a burst of strength in the West for new home sales created a 2.0 percent increase in national sales of new homes for the month of February.
- Sales in the West jumped a whopping 39 percent which was a reversal from the prior month’s decline of 33 percent.
- The West always plays a major role in the data for this report as the West is the largest market for new construction.
Next week week’s potential market moving reports are:
- Monday March 28th – Pending Home Sales
- Tuesday March 29th – S&P Case-Shiller Home Price Index
- Wednesday March 30th – ADP Employment Report, MBA Applications & EIA Petroleum Status
- Thursday March 31st – First Time Jobless Claims & Durable Goods Orders
- Friday April 1st – Employment Situation, ISM Manufacturing Index &Construction Spending