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By Matthew
Klein | Friday, April 23 House
Hunting. Americans bought 85,000
new homes in March on a seasonally-adjusted basis, according to
data published today by the Census
Bureau. It was the best month
for new home sales since August 2006. In the years before the pandemic hit,
Americans bought just 52,000 new homes monthly. The ongoing
surge in demand is another indicator of the strength of the U.S. consumer. As
IHS Markit put it in a note today, “The U.S. is on track for extraordinary
GDP growth this year”—and that seems to matter more for investors than any
proposed changes to the taxation of capital gains or corporate profits. Despite new
talk of tax hikes, the S&P 500 rose 1.1%, while the Russell
2000 index
of small-cap stocks rose by 1.8%. The S&P is at its second-highest level
ever, just 0.2% below the peak reached last Friday, while the Russell is at
its highest level since mid-March. The gains
were broad-based, with 403 of the components in the S&P up for the
day—all 11 sectors were either up or essentially flat. Financials, materials,
and technology stocks were among the best performers, while defensive
consumer staples and utilities did the worst. Many of the
biggest winners of the day—including SVB
Financial Group, Seagate
Technology, Xilinx, Advanced
Micro Devices, Aptiv, Skyworks
Solutions, and Qorvo—are part of
the broader tech hardware complex and/or have some connection to the
ongoing chip shortage affecting motor vehicle manufacturing. American
Airlines and United
Airlines were also among the biggest winners, likely
reflecting the ongoing success of the U.S. vaccination campaign. On the other
side was a long list of consumer product companies that had outperformed
earlier in the pandemic: Kimberly-Clark, Clorox, Church & Dwight, J.M. Smucker, Colgate-Palmolive, Campbell Soup, Kraft Heinz, Hasbro, Hormel Foods, and General Mills. The other
notable loser for the day was Intel, which fell
on the back of a poorly
received earnings report. Stocks were
up slightly in much of the rest of the world, including Australia, Canada,
China, Hong Kong, and Korea, although markets were down in Europe and Japan.
U.S. Treasury yields were essentially flat, although yields on longer-term
Treasury Inflation-Protected Securities (TIPS) have been edging lower. Gold
and silver were both down slightly, but the price of copper rose to hit its
highest level since early 2011 and is now just 6% below its all-time high. Watch our TV
show on Fox Business Fridays at 10 p.m. or 11:30 p.m. ET; Saturdays at 10
a.m. or 11:30 a.m.; or Sundays at 7 a.m., 10 a.m., or 11:30 a.m. This week,
see an interview with Intel CEO Pat
Gelsinger on how to ease the global chip shortage. |
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DJIA: +0.67% to 34,043.49 The Hot
Stock: SVB Financial
Group +8.7% Best Sector:
Financials +1.9%
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