MARKET WATCH: April 26, 2021

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Sales of existing homes, which had been one of the few areas of the economy to progress during the pandemic, are now showing definite signs of slowing. According to the National Association of Realtors®, existing-home sales declined in March for the second consecutive month. Total existing-home sales fell 3.7% last month following a 6.6% drop in February. Overall, sales are 12.3% higher than a year ago. Relatively low inventory may be the primary reason for the slippage in sales volume. According to the report, unsold inventory of existing homes sits at a 2.1-month supply at the current sales pace, marginally up from February’s 2.0-month supply and down from the 3.3-month supply recorded in March 2020. The median existing-home price in March was $329,100, 5.1% above the February price and up 17.2% from March 2020. Sales of existing single-family homes also fell in March, declining 4.3% from the prior month but up 10.4% from a year ago. The median existing single-family home price was $334,500 in March ($317,100 in February), up 18.4% from March 2020.

• Unlike existing homes, sales of new, single-family homes continued to surge in March. According to the latest information from the Census Bureau, sales of new single-family homes increased 20.7% over February’s total and are 66.8% above the March 2020 estimate. The median sales price of new houses sold in March 2021 was $330,800 ($345,900 in February). The average sales price was $397,800 ($394,300 in February). In March, inventory sat at a supply of 3.6 months at the current sales rate, down from 4.4 months in February.

• For the week ended April 17, there were 547,000 new claims for unemployment insurance, a decrease of 39,000 from the previous week’s level, which was revised up by 10,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims was 2.6% for the week ended April 10, a decrease of 0.1 percentage point from the previous week’s rate. For comparison, during the same period last year, there were 4,202,000 initial claims for unemployment insurance, and the insured unemployment claims rate surged to 11.0% as the effects of the pandemic continued to impact the labor market. The advance number of those receiving unemployment insurance benefits during the week ended April 10 was 3,674,000, a decrease of 34,000 from the prior week’s level, which was revised down by 23,000. This is the lowest level for insured unemployment since March 21, 2020, when it was 3,094,000. States and territories with the highest insured unemployment rates in the week ended April 3 were in Nevada (5.6%), Connecticut (5.2%), Alaska (5.1%), New York (4.4%), Illinois (4.2%), Pennsylvania (4.2%), the District of Columbia (4.1%), Rhode Island (4.0%), Vermont (4.0%), and California (3.7%). The largest increases in initial claims for the week ended April 10 were in New York (+16,028), Florida (+9,377), Alabama (+5,517), Washington (+5,380), and Georgia (+4,759), while the largest decreases were in California (-76,082), Virginia (-23,492), Ohio (-21,831), Texas (-17,436), and Kentucky (-15,424).

Eye on the Week Ahead

Several important economic reports are available this week. The Federal Open Market Committee meets this week. Interest rates are certain to remain at their present range based on statements from Federal Reserve Chair Jerome Powell. The latest information on durable goods orders is out on Monday. New orders for durable goods fell in February, but are expected to reverse course in March. The estimate of the first-quarter gross domestic product is available on Thursday. The 2020 fourth-quarter GDP advanced at an annualized rate of 4.3%. It is expected that growth in the first quarter economic will exceed the prior quarter’s figure.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

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