Stocks are flattish after another Trump assassination attempt and the suspension of talks with Iran. Bonds and MBS are up small.
The week ahead will be dominated by the FOMC meeting. The Fed Funds futures are forecasting no change in interest rates, but the markets will be looking for clues about potential rate increases. In addition to the Fed decision we will get housing data with prices and housing starts, the first estimate of Q1 GDP and personal income / outlays which contain the PCE Price Index.
Earnings season continues with numbers expected from market bellwethers such as Google, Amazon, Apple and Meta. In resi names, we will get earnings from Rithm, Equity Residential, Invitation Homes, Redwood Trust, Tri Pointe Homes and Adamas (ex NYMT).
The Department of Justice is dropping its investigation of Jerome Powell over the Fed’s remodeling project. This investigation was ill-advised at best, and really had zero positive effects. In response, Senator Thom Tillis refused to vote to confirm Kevin Warsh until the investigation was dropped. The DOJ’s retreat should clear the decks to confirm Warsh and a new era will begin at the Fed.
Consumer sentiment fell in April according to the University of Michigan Consumer Sentiment Survey. “Consumer sentiment ticked down 3.5 index points this month, now comparable to the trough seen in June 2022. Decreases in sentiment were seen across political party, income, age, and education. Expected business conditions declined for both short and long time horizons, nearly matching year-ago readings when the reciprocal tariff regime was implemented. After the two-week cease-fire was announced and gas prices softened a touch, sentiment recovered a modest portion of its early-month losses. The Iran conflict appears to influence consumer views primarily through shocks to gasoline and potentially other prices. In contrast, military and diplomatic developments that do not lift supply constraints or lower energy prices are unlikely to buoy consumers.”
Year-ahead inflation expectations surged again, from 3.8% to 4.7%. This mirrors the jump seen last year at this time which was driven by tariffs.
The Spring Selling Season is inching towards buyers having the upper hand, as new listings increase. Sales jumped last week, although the the rise was impacted by the placement of Easter last year. “Looking through the holiday noise, the underlying trend points to a market where sellers are gradually reengaging, a welcome sign for buyers and a good omen for market liquidity moving forward this spring,” says Realtor.com senior economist Jake Krimmel. The median listing price fell 1.7%.
Re/Max is being sold to The Real Brokerage in a $550MM deal. This is a “tech meets “boots on the ground” deal which pairs AI with brokers.
