Daybreak with Anton Anton Bayer

The US Census Bureau reported today that March housing starts plummeted 14.7% month over month (MoM) to 1.321 million.  This reverses February MoM gain with March’s new starts the lowest since August 2023 and biggest decline since April 2020.  What does this mean for the housing market and will it impact the stock market.  Listen in this issue our view on this report and the potential impact on the US economy.

Therefore, to understand the financial health of the US we need to look no further than to monitor the financial health of households and consumers.  To simplify the US economic equation is simply:
People working  =  people spending  =  economic activity
In this issue we review today’s Retail Sales report and evaluate the financial health of consumers and the probability of continued expansion of the US economy.

The media and analysts are back to the good news is bad news routine.  Meaning that when economic news is positive then the potential of the Federal Reserve lowering interest rates declines.  Read in this Weekly Brief our review of several key benchmarks on the economy and the prospects the Federal Reserve will lower interest rates soon.

One economic indicator we monitor is the US Purchasers Manufacturing Index (PMI).  This index is based on monthly questionnaire surveys of selected companies that offer an advance indication on month-to-month activity in the private sector economy.  This index tracks changes in variables such as production, new orders, stock levels, employment, and prices across manufacturing industries. Historically, when the PMI index is above 50 it represents a growing manufacturing industry and below 50 indicates contraction.  Listen to this Weekly Brief the results of the recently released PMI report and our analysis of this report.

The start of new construction housing increased 10.7% to 1.521 million units month-over-month to an annualized rate in February after falling 12.3% in January.  The February increase was well above the consensus of 1.449 million units in the Econoday’s survey of forecasters.  Read in this Weekly Brief our analysis of the improving housing market and whether it is a precursor to the future of the stock market.

Although many companies are experiencing record sales with the stocks hitting all-time highs, the small business sector seems to be missing the party all together. For several years we have been writing about the lagging S&P 600 Small Cap Index to its peers of the S&P 500, NASDAQ, and S&P 400 Mid Cap Indices.  Today we review the National Federation of Independent Business (NFIB) release yesterday that indicated the 26th consecutive month the small business optimism index is below its 50-year average.  Listen in this issue why small business owners have not been this pessimistic since 2013 and the outlook for the S&P 600 Small Cap index.