Solid week for the stock market amid conflicting news about home sales surging while housing starts have slid. As I write this, the stock market is up strongly Monday morning with all major indexes up more than 1 percent during the first hour of trading! After this week, one-third of 2017 will be gone so let’s hope for a strong market finish to week!
Existing Home Sales High A 10-Year Peak
Rising 4.4 percent for March, resales surpassed expectations – analysts polled by Reuters projected a gain of 2.5 percent. The National Association of Realtors said that sales were 5.9 percent improved from a year before and that put them at their best level since February 2007, even with existing home inventory 6.6 percent slimmer than in March 2016.1
Construction Activity Wanes
Department of Commerce data showed a 6.8 percent reduction in housing starts in March. Even with that fall, starts were up 9.2 percent in 12 months. Building permits rose 3.6 percent last month, resulting in a 17.0 percent annualized increase.2
Light Sweet Crude Slides 7% In 5 Trading Days
WTI crude settled at $49.62 Friday, 7.4 percent below where it had closed a week earlier. One influence was a Baker Hughes report showing that the number of active rigs had increased for a fourteenth consecutive week.3
Stocks End Choppy Week Higher
Five days of rollercoastering ultimately sent the S&P 500 to a 0.85 percent weekly gain. The Dow Jones Industrial Average and Nasdaq Composite respectively advanced 0.46 percent and 1.82 percent in the same stretch. At Friday’s close, the Dow settled at 20,547.76; the S&P, at 2,348.69; and the Nasdaq, at 5,910.52.4
Monday, earnings arrive from Coach, Express Scripts, Halliburton, Hasbro, Kimberly-Clark, Newmont Mining and T. Rowe Price. The Conference Board’s April consumer confidence index the February S&P/Case-Shiller home price index, and March new home sales data appear Tuesday, along with earnings from 3M, AT&T, Baker Hughes, Biogen, Capital One, Caterpillar, Chubb, Coca-Cola, Eli Lilly, Fifth Third, Freeport-McMoRan, McDonald’s, Northern Trust, Novartis and Xerox. On Wednesday, the earnings lineup includes Alaska Air, Amgen, Anthem, Boeing, Credit Suisse, Dr. Pepper Snapple Group, Equifax, GlaxoSmithKline, Hershey, Ingersoll-Rand, Norfolk Southern, O’Reilly Auto Parts, PepsiCo, Procter & Gamble, Rockwell Automation, State Street and T-Mobile. Earnings from Alphabet, Amazon, American Airlines, Comcast, Dow Chemical, Expedia, Ford Motor Co., MGM Resorts, Microsoft, Parker-Hannifin, Southwest Airlines, Under Armour and Western Digital all roll out Thursday, complementing reports on initial jobless claims and March durable goods orders and housing contract activity. Exxon Mobil, General Motors, Phillips 66, UBS Group AG and Weyerhaeuser issue earnings news Friday, as investors also consider the federal government’s first estimate of Q1 growth and the University of Michigan’s final April consumer sentiment index.
|% CHANGE||YTD||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||5/5 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.40%||0.24%||-0.24%||2.27%|
Sources: wsj.com, bigcharts.com, treasury.gov – 4/28/174,5,6,7
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.
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- 1 – reuters.com/article/us-usa-economy-housing-idUSKBN17N1QU [4/21/17]
- 2 – marketwatch.com/story/housing-starts-fall-7-but-permits-pick-up-the-slack-in-march-2017-04-18 [4/18/17]
- 3 – foxbusiness.com/markets/2017/04/21/oil-ends-under-50-as-signs-rising-us-output-cast-doubts-over-opec-cut-extension.html [4/21/17]
- 4 – markets.wsj.com/us [4/21/17]
- 5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F21%2F16&x=0&y=0 [4/21/17]
- 5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F21%2F16&x=0&y=0 [4/21/17]
- 5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F21%2F16&x=0&y=0 [4/21/17]
- 5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F20%2F12&x=0&y=0 [4/21/17]
- 5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F20%2F12&x=0&y=0 [4/21/17]
- 5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F20%2F12&x=0&y=0 [4/21/17]
- 5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F20%2F07&x=0&y=0 [4/21/17]
- 5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F20%2F07&x=0&y=0 [4/21/17]
- 5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F20%2F07&x=0&y=0 [4/21/17]
- 6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/21/17]
- 7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/21/17]