Week of March 3, 2023 Weekly Recap & The Week Ahead
…“People somehow think you must buy at the bottom and sell at the top to be successful in the market. That’s nonsense! The idea is to buy when the probability is greatest that the market is going to advance”… Jesse Livermore
1. Home-Price Growth Slowed in 2022 — home-price growth decelerated in 2022 after a rapid rise in mortgage rates priced many buyers out of the market.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the nation, rose 5.8% in the year ended in December, down from a 7.6% annual rate the prior month. The increase was the lowest December-to-December change since 2019. On a monthly basis, the index fell 0.8% in December compared with November, the sixth straight month-over-month decline. Existing-home sales dropped 17.8% in 2022 to the lowest level since 2014, as the surge in mortgage rates brought the pandemic-driven housing boom to an abrupt halt.
2. Long-Robust U.S. Labor Market Shows Signs of Cooling — demand for U.S. workers shows signs of slowing, a long-anticipated development that is appearing in private-sector job postings even while government reports indicate the labor market is running hot. Figures from ZipRecruiter Inc. and Recruit Holdings Co., two large online recruiting companies, show the number of job postings on their sites declined more late last year than the Labor Department report on job openings for that period indicated. The companies report available jobs fell further this year, potentially foretelling a decrease in openings in coming Labor Department reports, and a slowdown in hiring this year.
3. 10-Year Treasury Yield Tops 4% for First Time Since November — lingering inflation and fears of higher interest rates lifted the 10-year Treasury yield above 4% on Wednesday, marking a fresh acceleration for a historic bond-market rout.
The climb carried the key measure of borrowing costs back toward the decade-plus highs reached last year. Spurring the most recent leg: a run of strong economic data that dashed hopes inflation will rapidly slow to near the Federal Reserve’s 2% target. Yields topped 4% Wednesday morning after a slightly stronger-than-expected survey of manufacturing activity. Rising yields lift borrowing costs for consumers and companies, and hurt the prices of other investments by offering steady payouts with lower risk. The climb in yields has buffeted major stock indexes, with the S&P 500 losing around 2.6% in February.
4. Fed Official Says Hotter Data Will Warrant Higher Rates — the Federal Reserve will need to raise rates to higher levels than previously anticipated to prevent inflation from picking up if the recent strength in hiring and consumer spending continues, a central bank official said Thursday. Mr. Waller didn’t say in his prepared remarks whether he would continue to favor raising interest rates by a quarter-percentage point, which was his preference at the Fed’s last meeting, or whether he would instead support a larger half-point increase at its next gathering, March 21-22. The Fed’s rate-setting committee voted unanimously last month to slow rate increases by lifting their benchmark federal-funds rate by a quarter percentage point—to a range between 4.5% and 4.75%—following larger moves of a half point in December and 0.75 point in November.
The week ahead — Economic data from Econoday.com:
