Market Review April 16, 2024

The economic data released on April 16, 2024, highlights key metrics that influence the housing, industrial, and energy sectors. The reports showcase declines in housing metrics but stability in industrial production and slight optimism in economic growth forecasts. The varied data have implications across financial markets, affecting investor sentiment and policy considerations.

Today's Event Overview

• Building Permits (Mar): There was a decrease to 1.458M from the forecast of 1.514M and the previous 1.523M, indicating a potential slowdown in future housing construction.
• Housing Starts (Mar): Reported at 1.321M, significantly below the forecast of 1.480M and previous 1.549M, suggesting a sharp decline in new residential construction projects.
• Housing Starts (MoM) (Mar): Showed a dramatic decrease of -14.70%, much lower than the forecasted -2.40% and a reversal from the previous growth of 12.70%, indicating significant volatility and contraction in the housing market.
• Industrial Production (MoM) (Mar): Remained steady at 0.40%, consistent with the forecast and previous month, showing stable industrial activity.
• Industrial Production (YoY) (Mar): Showed no growth (0.00%), an improvement from the previous -0.30%, indicating stabilization in the industrial sector over the past year.
• Atlanta Fed GDPNow (Q1): The GDP forecast was revised upwards to 2.90% from 2.80%, suggesting a slight improvement in economic growth expectations.
• API Weekly Crude Oil Stock: Increased to 4.090M from the previous 3.034M, indicating a build-up in oil inventories, which may influence energy prices and economic indices.

Impact Analysis

• Impact on USD:
• The mixed housing data and stable industrial production may lead to cautious optimism. The uptick in GDP forecasts could support the USD, but concerns about housing could temper gains.
• Increased crude oil stocks suggest potential downward pressure on oil prices, which could impact inflation expectations and USD strength indirectly.

• Impact on Gold:
• The decline in housing starts and the uncertainty in the housing market could increase gold's appeal as a safe haven.
• Stability in industrial production might not significantly sway gold prices, but economic uncertainty highlighted by volatile housing data could bolster gold investment.

• Impact on Equity Futures:
• Equity markets might react negatively to the sharp decline in housing starts, seeing it as a sign of potential economic cooling.
• Steady industrial production and slight economic growth optimism (from GDPNow data) might provide some support to equity markets, especially in sectors unrelated to housing.

The data presents a complex picture with strong contrasts between the housing and industrial sectors. The significant downturn in housing activity is a concern and will likely dominate economic discussions, potentially overshadowing the stable yet uninspiring performance in the industrial sector.