Lower mortgage rates provided some relief to the housing market, but home builder sentiment continued to decline. Meanwhile, U.S. equities ended a four-week losing streak as market volatility eased. This week, key data releases will focus on new home sales, consumer confidence, durable goods, and personal income and spending.
Key Economic Data: Housing, Retail Sales, and the Fed’s Decision
Housing Market Trends: Mixed Signals Persist
- Home Builder Sentiment: The NAHB Housing Market Index fell to 39, missing expectations of 42, as mortgage rates remained elevated and tariff concerns impacted confidence.
- Existing Home Sales: Sales surged 4.2%, reversing prior declines, as lower mortgage rates and rising inventory helped meet pent-up demand.
Retail Sales and Federal Reserve Update
- Retail Sales: February retail sales rebounded by 0.2%, falling short of the expected 0.6% increase. Non-store retailers saw the strongest gains, while food services and drinking places experienced the largest declines.
- Federal Reserve Rate Decision: As widely anticipated, the Fed held rates steady at 4.50%, signaling a wait-and-see approach to future adjustments.
Stock and Bond Market Performance This Week
Equities: A Break from the Losing Streak
U.S. stocks posted gains after four consecutive weeks of declines. Sectors leading the market included:
- Energy & Financials: Beaten-down stocks in these sectors rebounded.
- Health Care: This sector also saw gains.
- Consumer Staples, Materials & Utilities: These traditionally defensive sectors lagged behind.
Fixed Income: Treasury Yields Shift
The Treasury yield curve saw movements reflecting near-term economic uncertainty:
- 2-year Treasury yield: Dropped 7 basis points (bps) to 3.95%.
- 10-year Treasury yield: Declined 5 bps, closing at 4.25%.
Market Takeaways: What’s Driving the Trends?
- Retail sales and home builder sentiment came in weaker than expected.
- Lower mortgage rates supported housing demand but did not boost builder confidence.
- Eased market volatility coincided with the Fed’s blackout period and muted trade negotiations.
- The Treasury yield curve continues to invert, signaling economic uncertainty.
Upcoming Financial Reports: Housing, Consumer Sentiment, and Spending
This week, key data releases will offer further insight into economic conditions:
- Tuesday, March 25: New home sales for February and the Conference Board Consumer Confidence Index for March. Home sales are expected to rise, while consumer confidence is forecasted to decline for a third straight month.
- Wednesday, March 26: Durable goods orders for February. Analysts anticipate a decline following a strong January increase.
- Friday, March 28: Personal income and spending report for February. Both metrics are projected to show moderate growth.
Tom Hine is aCERTIFIED FINANCIAL PLANNER®professionaland owner of Capital Wealth Management. He works with individuals and families on financial planning, retirement strategies, and investment management. With offices in Glastonbury and Wilton, CT, Tom serves clients across Connecticut and throughout the U.S. Connect with Tom
Disclosures: This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.
Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poor’s. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The Dow Jones Industrial Average is computed by summing the prices of the stocks of 30 large companies and then dividing that total by an adjusted value, one which has been adjusted over the years to account for the effects of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index. The Bloomberg US Aggregate Bond Index is an unmanaged market value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year. The U.S. Treasury Index is based on the auctions of U.S. Treasury bills, or on the U.S. Treasury’s daily yield curve. The Bloomberg US Mortgage Backed Securities (MBS) Index is an unmanaged market value-weighted index of 15- and 30-year fixed-rate securities backed by mortgage pools of the Government National Mortgage Association (GNMA), Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC), and balloon mortgages with fixed-rate coupons. The Bloomberg US Municipal Index includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than 2 years) selected from issues larger than $50 million. One basis point is equal to 1/100th of 1 percent, or 0.01 percent. One basis point (bp) is equal to 1/100th of 1 percent, or 0.01 percent.
This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete, it is not a statement of all available data necessary for making an investment decision and it does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Any opinions are those of the author, and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice.