Stocks began the week on the upside, marking a second-straight positive session—a somewhat elusive feat in recent weeks. In overnight trading, markets in Asia closed in the plus column, and the favorable momentum had carried over to Europe, as well. Meanwhile, ahead of today’s opening bell, U.S. stock futures were indicating a modestly lower start for the major indexes.
Turning to economic news, this morning we got the latest sets of figures on the home construction market. The Census Bureau reported that housing starts came in at a seasonally adjusted annual rate of 1.501 million for February, well ahead of the consensus estimate of 1.38 million and the revised January estimate of 1.35 million (previously 1.366 million). However, the figure was 2.9% below the February, 2024 rate of 1.546 million. Meanwhile, building permits (which are a more forward-looking indicator) were at an annualized rate of 1.456 million last month, down from 1.473 million in January but ahead of the 1.45 million forecast. Year over year, the rate was down 6.8% from the February, 2024 rate of 1.563 million.
Shortly after the opening bell, the Federal Reserve was scheduled to release its report on industrial production for last month. Analysts were calling for a month-over-month increase of 0.2% for February, up from 0.5% in January.
Tomorrow, the Federal Open Market Committee (FOMC) will conclude its two-day meeting on monetary policy. Wall Street expects that Chairman Jerome Powell will announce no changes to the central bank’s overnight lending rate. However, traders will be keen to hear what he might have to say on the economic outlook, and prospects for rate cuts in the months ahead. According to the fed funds futures, most market participants do not expect a move down until at least the June meeting. However, prognosticators are calling for a greater than 75% probability of at least a 50-basis-point cut before the end of the year.
Thursday brings the Department of Labor’s report on initial jobless claims, with forecasts indicating an uptick to 222,000, versus 220,000 the week before. That same day, we also get the February figures for existing home sales from the National Association of Realtors. Forecasts are suggesting a total of around 3.94 million, which would be down from the 4.08 million recorded in January.
Summing up Monday’s price moves for the major indexes, the Dow Jones Industrials climbed 353 points, or 0.9%, the S&P 500 gained 36 points (0.7%), and the tech-heavy NASDAQ advanced 54 points (0.3%). –Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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