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The insanity of the NCAA basketball tournament is certainly living up to its reputation. Is your bracket as busted as mine? Hopefully your team is still in it. The Michigan Wolverines certainly gave me a thrill Saturday night.

Retail sales numbers introduced just a little of their own craziness into the market. I can talk basketball all day long, but if you’re reading this, you’re here for the economic data. Let’s talk market volatility.

Headline News

Consumer Price Index (CPI)

Inflation was up 0.2% in February, matching expectations. It’s risen 2.2% on the year. The pricing gains held at 0.2% even when food and energy were taken out. The yearly price increase in this category is 1.8%.

Transportation costs were unchanged following big gains in January, with new car prices down 0.5% and used car costs down 0.3%. Communication prices were also soft with the cost of wireless phone service falling 0.5% on the month in February. Medical care costs were down 0.1%, and recreation prices were unchanged.

There were categories that had some stronger gains. Housing was up 0.3%, though the amount owners would pay for rent was only up 0.2%. The prices of apparel showed big increases, particularly in men and boys subcomponents.

Quicken Loans Home Price Perception Index (HPPI)

The difference of opinion on home values narrowed in February as appraisers valued homes just 0.53% lower than homeowner estimates, according to Quicken Loans data.

Breaking down the regional data, homeowners in the West overestimated value by just 0.32%. Those in the Midwest and South overvalued their homes by 0.55% and 0.58% each. Meanwhile, Northeastern homeowners inflated estimates by 0.68%.

At the local level, Dallas is running hot, with appraisals coming in 2.72% above homeowner estimates. Philadelphia homeowners are on the other side of the scale, overvaluing properties by 1.84%. Atlanta homeowners are closest to balance, high in their estimates by just 0.07%.

Quicken Loans Home Value Index (HVI)

Home values fell 0.07% in February, but they’re still up 6.37% compared to last year at this time.

It’s important to note that the pricing weakness for the month was pretty much centered in the West, where appraised values were down 1.87% on the month, but still up 6.99% on the year. The Midwest was up 0.42% and 7.23% yearly. Meanwhile, the Northeast rose 0.44% and is up 5.44% annually. Finally, the South was up 0.92% and 5.67% on the year.

MBA Mortgage Applications

Mortgage applications were up 0.9% overall as purchase applications rose 3.0% last week. Refinance applications fell 2.0% as they continue to be affected by rising rates.

The average rate on a 30-year-fixed conforming mortgage was up for basis points to 4.69% last week.

Producer Price Index (PPI)

Producer prices were up 0.2% in the month of February and have risen 2.8% on the year. This is important to track because if producers pay higher prices for goods and services, this may well be passed on to consumers down the line.

When food and energy were taken out, the pricing gains remained the same at 0.2%, and they’ve risen 2.5% annually. When trade services were further removed, prices were up 0.4% and have gone up 2.7% on the year.

Breaking down the data a little further, the price of goods fell 0.1%, and food prices were down 27%, with a big drop in the price of vegetables. Trade services were down 0.2%, while construction prices were only up 0.1%. Finished goods prices for light trucks, cars and computers were all down quite a bit.

Retail Sales

Retail sales were projected to increase by 0.4% in the month of February. Instead, they fell 0.1% for the second straight month. Consumers aren’t spending a ton of money right now.

When cars and trucks are taken out of the mix, retail sales are up 0.2%. Vehicle sales overall were down 0.9% on the month, which puts the nail in the coffin of the post-hurricane vehicle replacement sales spike the industry saw. When gas was further removed, sales were up 0.3%. Gasoline sales were down 1.2% and food sales were down 0.1%.

Department store sales were down 0.9%, with sales at furniture stores down 0.8%. Health and personal care stores saw sales drop 0.4%.

Sales at non-store retailers were up 1%. Building material sales were up 0.9%, while restaurants saw sales increase 0.2%.

Jobless Claims

Initial jobless claims were down 4,000, coming in at 226,000. The four-week average fell 750 to come in at 221,500. The claims filing procedure in Puerto Rico and the Virgin Islands is still being hindered by the aftereffects of hurricane season, affecting the accuracy of the claims numbers in those regions.

On the continuing claims side, these were up 4,000 to 1.879 million. However, the four-week average decreased to about 1.891 million, down 17,250 from the previous week.

Housing Market Index

The housing market index was down one point in March to come in at 70, but home builders still remain very optimistic. The present sales component remained steady at 77, but predictions for sales in the next six months fell two points to 78. Traffic of prospective buyers in new homes was down three points, but still growing at 51.

Regional data varied widely, but they all showed growth. The West came in strongest at 78. The Northeast is the slowest market, but it’s still showing growth at 56.

Housing Starts

Housing starts were down 7.0% to a seasonally adjusted annualized rate of 1.236 million in February. This won’t help supply in the housing market at all. Single-family permits were down 0.6% to 872,000. Year-to-year, starts are now only up 4.6%.

The good news is single-family starts were up 2.9% to 902,000. Completions were up 3.0% on a single-family side to 895,000.

There is plenty of weakness on the multi-family side. Starts were down 26.1% to 334,000 and fell 18.7% on the year. Permits are up 10.6% on the year, despite falling 14.8% on the month at 426,000. On a good note, completions are up 19.4% to 424,000.

Industrial Production

Industrial production rose 1.1% on the month, as manufacturing was up 1.2%. Factory capacity utilization was up 0.7% to 78.1%.

There was a 4.3% jump in mining. Analysts say more manufacturing also points to increased business investment. Demand for construction supplies is picking up in a good sign for the housing market. High-tech production also increased, as did vehicle production.

There was a 4.7% downturn in utility production with the warmer weather.

Consumer Sentiment

Consumer sentiment was up 2.3 points to 102.0 in preliminary readings for March. This represents a 14-year high.

The current conditions index has gains in both spending and employment. It’s up almost 8 points to come in at 122.8 and reflects special increasing confidence among those with lower incomes. The expectations component was down 1.4 points to 90.0. There are income doubts among those with higher incomes.

Expectations for inflation over the next five years were flat at 2.5%, but expectations for inflation over the next year are up 0.2% to 2.9%.

Mortgage Rates

Fixed mortgage rates were down last week. If you’re getting ready to buy or take cash out, now is the time to lock your rate if you see one you like.

The average rate on a 30-year-fixed mortgage with 0.5 points in fees was down two basis points to 4.44% last week. At the same time a year ago, the rate was 4.30%.

Looking at shorter-term, the average rate on a 15-year fixed mortgage with 0.5 points was down four basis points to 3.90%. The average rate at this time last year was 3.50%.

Finally, the average rate on a 5-year treasury-indexed hybrid adjustable rate mortgage with 0.4 points was 3.67%, up four basis points on the week and rising from 3.28% a year ago.

Stock Market

The stock market has fears of a trade war with many different countries as a result of the proposed tariffs President Trump would like put in place. This led to weekly losses.

The Dow Jones industrial average was down 1.54% on the week, despite being up 72.85 points Friday. It finished at 24,946.51 points. The S&P 500 finished the week at 2,752.01, up 4.68 points on the day but down 1.24% for the week. Finally, the Nasdaq was flat on Friday, closing down 1.04% on the week at 7,481.99.

The Week Ahead

Wednesday, March 21

MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications to mortgage lenders. This is a leading indicator for single-family home sales and housing construction.

Existing Home Sales (10:00 a.m. ET) – Existing Home Sales tallies the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends.

Thursday, March 22

Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals filing for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.

FHFA House Price Index (9:00 a.m. ET) – The Federal Housing Finance Agency (FHFA) House Price Index (HPI) covers single-family housing using data provided by Fannie Mae and Freddie Mac. The HPI is derived from transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.

Friday, March 23

Durable Goods Orders (8:30 a.m. ET) – These are based on new orders placed with domestic manufacturers for factory hard goods.

New Home Sales (10:00 a.m. ET) – This measures the number of newly constructed homes with a committed sale during the month.

In addition to these reports, there’s a Federal Reserve rate decision at which the committee is widely expected to increase short-term interest rates. We’ll have it all covered for you next week.

If economic data and mortgage rates don’t float your boat, we have plenty of home, money and life content to share with you if you subscribe to the Zing Blog below. March is reading month, and if you’re into finance books, we’ve got some great suggestions for you. Have a great week, and if you’re into basketball, good luck to your team in the tournament. Go blue!

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