April 21, 2023

Weekly Market Commentary April 17th to April 21st 2023

US housing starts fell in March as a pullback in multifamily projects more than offset a pickup in construction of single-family homes. Beginning home construction fell 0.8%, multi-family starts dropped 5.9%, and single-family homebuilding increased 2.7% to a three-month high. Building permits were also lower, dropping 8.8%

MBA mortgage applications fell 8.8% last week after rising 5.3% the week prior. Purchases declined 10% and refis declined 5.8%, with the average 30-year fixed rate rising to 6.43%, snapping a 5-week decline in borrowing costs. Existing home sales fell in March by more than expected to 4.44 million. This 2.4% decline from last month’s numbers shows that the housing market may still be on shaky footing even after the large surge in February sales. Houses priced from $250,000 to $500,000 made up half of the sales, and about 28% of all sales went above the listing price.

Initial jobless claims rose to 245,000, higher than the 240,000 estimate. Jobless claims have been on a steady uptrend since the start of 2023, reaching levels we haven’t seen in over a year. Layoffs continue to be in the headlines for some of the largest companies, reflecting growing concerns about the health of the economy.

S&P Global Manufacturing PMI came in at 50.4, Services PMI at 53.7, and Composite PMI at 53.5, all above expectations and in expansionary territory. The readings reflect stronger services and manufacturing that analysts fear might threaten to reignite inflationary pressures as firms just increased their prices at the fastest pace in seven months.

The equity markets suffered a modest decline on the week, with the S&P 500 closing 0.10% lower to 4,133, the Nasdaq 0.57% lower to 12,054, and the Dow Jones 0.23% lower to 33,809. US Treasury yields rose on the week closing at multi-week highs; the 2-year closed at 4.18% and the 10-year closed at 3.57%.

Next week’s key economic data includes New Home Sales, Durable Goods, and Personal Consumption.

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