Stocks hinted at a potential rebound early Monday, but hopes for a bounce from last week’s Fed-induced selloff faded as the session wore on. This week will likely see lower trading volume than usual in the lead up to the Christmas holiday.
As for market participants who were around today, they were hit with another sign of a slowing economy courtesy of the latest housing data, which only elevated fears of a potential recession in 2023. The major market indexes reacted by adding to their already steep December losses.
The National Association of Home Builders (NAHB) (opens in new tab) this morning said its monthly housing market index, which measures homebuilder confidence, fell to 31 in December from November’s reading of 33. That marked the 12 straight month the index has declined, and was the lowest reading since 2012, outside of the pandemic.
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“The U.S. housing market is the most interest-sensitive sector of the economy and is reflecting the strong increase in interest rates engineered by the Federal Reserve,” says Raymond James economist Giampiero Fuentes. Today’s NAHB data confirms “that the U.S. housing market is already in recession, and the expectation is for it to remain there until interest rates start to decline.”
Energy was the lone sector that finished higher, eking out a marginal gain as U.S. crude futures climbed 1.2% to $75.19 per barrel. Meanwhile, rate-sensitive communication services (-2.3%) and information technology (-1.3%) stocks suffered significant losses. As such, the tech-heavy Nasdaq Composite led the path lower for the major indexes, shedding 1.5% to 10,546. The broader S&P 500 Index (-0.9% at 3,817) and the blue-chip Dow Jones Industrial Average (-0.5% at 32,757) also closed in the red.
Looking ahead, there are a few notable names on this week’s earnings calendar, with quarterly results from FedEx (FDX (opens in new tab)) and Nike (NKE (opens in new tab)) due out tomorrow. Earnings from the logistics giant and the athletic footwear and apparel retailer are often seen as a harbinger of …….
