Markets are again higher this morning on the back of better than expected economic data and dovish expectations for the Fed later in the day. Retail sales continue to show signs of improvement, albeit from very easy year over year comps. The ICSC and Rebook retail sales data both came in at 3.2% year over year. Both reports expect the trend in strong sales to continue as an early Easter is likely to pull sales in to March.
Housing starts came in better than expected. Month on month data was down 5.9% after an upward revision to January. Econoday has the details:
“February’s annualized pace of 0.575 million units beat the market consensus for 0.565 million units and was up 0.2 percent on a year-ago basis. January was revised up to 0.611 million units from the original estimate of 0.591 million units. The decline in February was led by a 30.3 percent decrease in multifamily starts, following a 18.5 percent gain in January. The single-family component slipped 0.6 percent after a 4.4 percent rise the prior month.
By region, the February drop in starts was led by a 15.5 percent fall in the South with the Northeast decreasing by 9.6 percent. Both regions were hit by heavy snow storms during the month. Starts in the Midwest rose 10.6 percent while the West gained 7.9 percent.”
The big news of the day will be the Fed decision. Investors are expecting no change in rates or the statement. Market participants are entering the decision in a fairly optimistic manner. The dollar is trading down against most other currencies and equities are up almost 0.5%. Any hawkish tone in the statement could ding the sentiment in most markets.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.