It’s housing starts day in the US and the signs aren’t great

Stock markets in the US, UK and Europe are all hitting record highs and the mood is buoyant. The US is cutting regulation and optimism is high. You would be mistaken if you think that rising tide lifts all boats.

The anchor of the market since the election has been housing-related, due to higher mortgage rates and the Fed pivot back towards neutral along with expectations for higher deficit spending.

The XHB home builder ETF struggled in December and has flat-lined since.

Toll Brothers reported earnings late yesterday and shares are down 6% in the pre-market.

“While demand was solid in our first quarter, we have seen mixed results
so far this spring selling season,” said CEO Douglas Yearley.
“Although demand has remained healthy in many of our markets and
particularly at the higher end, affordability constraints and growing
inventories in certain markets are pressuring sales – especially at the
lower end.”

At the bottom of the hour, we get the latest report on US housing starts and the consensus is for a sharp drop to 1.390m from 1.499m. That looks precipitous but it comes after a 15.8% increase in the prior report. It would take a fall below 1.294m to break the late-2024 lows.

This article was written by Adam Button at www.forexlive.com.