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In the Markets – Week-Ending March 25

by Peter J. Creedon

Newsletter: In the Markets – Week-Ending March 25
Crystal Brook Advisors
We Make Financial Planning Crystal Clear

United States: Sales of previously owned homes fell 7.1 percent in February, which was well below consensus. Exceptionally lean inventories have kept prices relatively firm, with the median price up 4.4 percent over the past year.(1) The FOMC downgraded its forecasts for growth, inflation and the fed funds rate last week. Despite the softer macroeconomic backdrop, corporations look set to add leverage as the credit cycle matures. (2)

Europe: There were two explosions in the Brussels airport’s departure area at 8 a.m. local time this morning and at least one explosion on the city’s subway network an hour later, causing deaths and injuries.

Asia: China’s coal use is forecast to fall a third year as industrial output slows, adding force to President Xi Jinping’s drive to cut overcapacity and dimming the hopes of global miners for an uptick in demand by the world’s biggest consumer.(3)

Monday 03/21

• U.S. stocks mustered small gains on Monday, but climbed enough to see the Dow log its longest win streak in months, while the S&P 500 reached its best close since late 2015.
• Oil futures finished higher, recouping much of the losses seen at the end of last week, as traders weighed the likelihood of a slowdown in production and took their positions for the expiration of the April contracts for West Texas Intermediate crude.(4)

Tuesday 03/22

• The U.S. markets remain near-term overbought, though the bigger-picture backdrop continues to strengthen.(5)

Wednesday 03/23

• New home sales rose 2.0 percent in February to a 512,000 annual pace. Sales for the prior month were also revised higher. The West accounted for all of February’s increase, which pulled the median sales price higher.(6)
• Architecture billings rose 0.7 points in February to 50.3, after dipping into negative territory in January. The South was the only region that posted a gain, and institutional and mixed-use contracted during the month.(7)

Thursday 03/24

• Our below-consensus call for Q1 GDP is based in part on tepid equipment spending and an inventory drag. Today’s durable goods report is on track with that, showing a drop in shipments and inventory drawdown.(8)
• Oil futures finished lower, but pared some of its worst losses of the day after a report showed that the number of rigs actively drilling for crude in the U.S. fell over the past week, suggested that production might soon decline.(9)

Friday 03/25

• Markets closed for the holidays.

Contributor: Felipe Vargas-Zúñiga

Sources:
(1) Source: National Association of Realtors and Wells Fargo Securities, LLC
(2) Source: Federal Reserve Board, Bloomberg LP and Wells Fargo Securities, LLC
(3) Source: Bloomberg
(4) Source: MarketWatch
(5) Source: MarketWatch
(6) Source: U.S. Department of Commerce, National Association of Realtors and Wells Fargo Securities, LLC
(7) Source: The American Institute of Architects and Wells Fargo Securities, LLC
(8) Source: U.S. Department of Commerce and Wells Fargo Securities, LLC
(9) Source: U.S. Department of Commerce and Wells Fargo Securities, LLC
(10) Source: The Conference Board and Wells Fargo Securities, LLC
(11) Source: Barron’s
(12) Source: MarketWatch