Weekly Market Commentary April 14th to April 18th 2025

The week was relatively quiet as there were no significant developments with tariffs, and as a result, the markets were more stable. Economic releases for the week were also quiet, with Retail Sales and data on Housing being the highlights.

Retail Sales were strong in March, growing by 1.4% and beating analysts’ expectations. Sales excluding automobiles and gasoline also beat expectations and were even upwardly revised for February. Vehicles and building materials were some of the sought-after goods, with restaurant sales also seeing an uptick after declining in February. These spending numbers ordinarily point towards a resilient consumer who’s still able to spend, which is good news for those fearing a recession. However, some analysts are theorizing that March’s strong spending is a result of consumers front-running tariffs by buying goods now before they succumb to price hikes.

Housing starts in the U.S. fell 11.4% to an annualized rate of 1.32 million, driven by a 14.2% decline in single-family home construction. Although March’s decline was larger than expected, the monthly percentage changes historically swing from positive to negative quite frequently, having just risen 11.2% in February. Building Permits increased by 1.3% in March, which was above expectations, mainly in multifamily construction. Overall, the housing market is in a state of slowing as high prices and mortgage rates weigh on consumers. The concern to watch for would be the effects of tariffs potentially increasing construction costs and raising home prices further.

The equity markets had a much needed break from the volatility seen in recent weeks. The S&P 500 fell 1.5% to 5,282, the Nasdaq fell 2.6% to 16,286, and the Dow Jones Industrials fell 2.7% to 39,142. Yields also fell on the week with the 2-Year U.S. Treasury down 17bps to 3.80%, and the 10-Year down 16bps to 4.33%.

Next week we will get more housing data in the form of New and Existing Home Sales, as well as data in the manufacturing and services industries.