Yesterday’s US public holiday saw the US stock market shut, so Wall Street’s week starts here with things getting off to a quiet start, with little sign of momentum being carried through from last week’s blockbuster performance.
The rise of the S&P comes despite signs of weakness in manufacturing and housing. The NAHB housing market index plunged a record 10 points in February from last month’s reading of 56, taking the index down to its lowest level since May of last year. Current sales fell sharply, although still keeping its nose in the growth area above 50, but traffic slumped to a reading of 31.
The market has been shrugging off weak economic reports for the last few weeks with the excuse that the softness is weather-related. This seems a little too blasé a response, but in the specific case of this housing report, there does seem to be some evidence to support this theory: California, which has been spared the wintry weather, came in as the strongest region, while the Northeast, which has suffered much of the extreme weather, showed notable weakness.
The Empire State Manufacturing Survey slipped to 4.48 in February, slowing from January’s reading of 12.51, with an especially-disappointing contraction shown in the new orders segment of the survey, which points to the likelihood of future slowing in employment and shipments. Once again it’s possible that heavy weather has skewed the result, and in that context, it will be interesting to compare today’s result with Thursday’s survey from the Philly Fed, a region that should have been afflicted by similar weather conditions.