Home Prices Decrease More Than Expected: Case-Shiller Index Shows 3.4% Growth in April, Market Resilient Despite Disappointing Data
The stock market is experiencing a potentially newsworthy day, with pre-market trading shrugging off most of the negative connotations that might have otherwise affected it. The blue-chip Dow is currently up 265 points, or 0.62%, while the S&P 500 is up 42 points, or 0.70%. The tech-heavy Nasdaq is leading the way, up 213 points, or 0.97%, and the small-cap Russell 2000 is up 18 points, or 0.87%.
Bond yields are roughly where they were yesterday's close: +4.35% on the 10-year and +3.85% on the 2-year. Oil prices have remained tame since temporarily spiking over the weekend due to Middle East tensions. The WTI is currently $65 per barrel and ICE Brent crude is $67. Market resiliency is apparent via all of these various metrics this morning.
One notable piece of data released today is the Case-Shiller Home Price Index, which shows an overall +2.7% gain in home prices year over year. However, the 20-city print was well below expectations of +4% growth to +3.4%, and down 70 basis points (bps) from the prior month's unrevised +4.1%. New York City once again led the way in price growth, at +7.9%. This was followed by Chicago at +6.0% and Detroit at +5.5%. The lowest in this survey was once again Tampa, -2.2%, which was one of only two cities in this index to post a negative April number (Dallas, at -0.2%, was the other).
After regular trading gets underway today, Fed Chair Jerome Powell will testify before the House Financial Services Committee about the health of the economy and the likelihood that the Fed will resume interest rate cuts at some point during the current calendar year. We don't expect Powell to deviate from his statements and press conference last week, when the Fed voted unanimously to keep the 4.25-4.50% Fed funds rate steady for the fourth-straight meeting. Powell returns to the Hill Wednesday to face the Senate Banking Committee for much the same reasons.
The June print on Consumer Confidence comes out after today's open, and expectations are for this to ramp back up toward levels we've largely maintained over the past few years, around 110 or so. After the "Liberation Day" tariffs were enacted in April, we saw a significant slide to 85.7. Today, analysts are looking for a 99.5 consensus, following last month's bump up to 98.0. Ultimately, these figures from The Conference Board do carry a certain level of volatility: highs of the past several years reached nearly 140 back in 2018, while the global financial crisis which resulted in the Great Recession back in 2009 sent Consumer Confidence below 30.
In summary, today's market update shows continued resilience despite some disappointing data on home prices and consumer confidence expectations. The Fed Chair's testimony will provide further insight into the health of the economy and the direction of monetary policy. Investors should stay tuned for any updates or changes in policy direction that may impact their investments.
