Having begun the short week with their worst day in a while, U.S. stocks made up most of the lost ground today. Last Friday, Federal Reserve Chair Janet Yellen spoke at a luncheon and reiterated that she is ready to increase the benchmark federal funds rate sometime this year if economic data meets her expectations. Since her comments come amidst a recent stream of good economic data, some market participants took the opportunity yesterday to pare some risk exposure. Read more about Stocks Bounce Back 05-27-15
According to the U.S. Commerce Department, housing starts in April jumped to the fastest annual rate (1.14 million) since November of 2007. After the abnormally cold winter, it appears construction activity is picking up. Currently, the housing market holds a below-normal, 4.6 months of inventory—6 months is considered healthy and balanced—and that likely encouraged the homebuilders to gear up for demand. The number of permits approved also climbed nicely, by 10.1 percent. Read more about Data-Dependent Fed Likely to Wait 05-20-15
Today, investors were treated to several economic reports.
U.S. April retail sales were essentially flat from March. Households cut back on big-ticket item purchases such as autos, a setback as the car market had previously been one of the brightest spots of the economic recovery. Other economic reports showed that weekly mortgage applications fell and U.S. business inventories increased only meekly. The latest data suggests that the U.S. economy isn’t particularly rebounding after a rough first quarter largely blamed on the harsh winter. Read more about Walking a Fine Line 05-13-15