Equity Markets Rebounded Last Week

Wall Street enjoyed a solid week of gains, rebounding from the prior week’s losses. Each of the major benchmark indexes climbed higher, led by the small caps of the Russell 2000, as investors moved from megacaps to cyclical stocks, which are influenced largely by the economy. Communication services was the only market sector to close in the red, while the remaining sectors moved higher, led by utilities, consumer staples, real estate and materials. Crude oil prices gained nearly 6.5% last week, driven by increasing conflict between Russia and Ukraine. The dollar and gold prices moved higher as investors sought safe-haven assets in light of increasing geopolitical risks.

New Home Construction Declined in October

October saw a downturn in new home construction and completions. According to the U.S. Census Bureau, the number of issued residential building permits fell 0.6% in October and 7.7% from a year earlier. Building permits for single-family homes rose 0.5% last month. Housing starts dropped 3.1% in October and were 4.0% under the October 2023 estimate. Single-family housing starts decreased 6.9% in October. Housing completions declined 4.4% last month but were 16.8% above the October 2023 rate. Completions of single-family homes in October were 1.4% below the September rate.

Eye on the Week Ahead

There is plenty of potentially market-moving economic information released this week. Two reports will draw the most attention: the second estimate of third-quarter GDP and the report on personal income and outlays. The October release showed GDP advanced 2.8%, while consumer spending rose 3.7%. Also last month, personal income rose 0.3%, personal consumption expenditures increased 0.5% and consumer prices rose 0.2%.