Weekly Market Commentary April 15th to April 19th 2024

Retail Sales in the U.S. surged in March by 0.7%. The core reading (excluding autos and gas) advanced by 1.0%, well ahead of consensus expectations of 0.3%. Online sales had the largest monthly increase since January 2022. February results were revised higher as well. The anticipated impact of the jump in consumption on economic growth led to a revised GDP forecast by the Atlanta Fed to 2.8% (from 2.5%) annualized in Q1 2024.

Housing Starts were much weaker than expected in March, falling 14.7%, while Building Permits fell by 4.3%. The news was gloomy for both single-family (-12.4%) and multi-family projects (-21.7%.) Following a brief recovery in February, the month-over-month declines in March were the lowest since April 2020.

Sales of Existing Homes pulled back last month as well, lower by 4.3% on a month-over-month basis and -3.7% from a year earlier. With elevated prices and limited inventory, homebuyers continue to stay put, awaiting more attractive financing opportunities. The weak data points were reported in an environment where national mortgage rates have approached 7.25%.

U.S. equities cooled a bit more after an historic bull run. The S&P 500 pulled back for a third consecutive week, lower by 3.0%. The technology-focused Nasdaq Composite was off by 5.5%. Long-term equity investors’ profits continue to remain intact this year despite the normal pullback. U.S. Treasury yields continued to follow the “higher for longer” narrative with the 10-Year closing the final trading session of the week higher by 9 basis points to 4.62%.

Key economic releases next week include New Home Sales, Durable Goods Orders, Personal Income and Outlays and an advance estimate of Q1 Gross Domestic Product.