US Stock Market Overview – Stocks Rally Lead by Energy, Despite Drop in Housing Starts

Stock prices moved higher on Tuesday, driven by gains in the Energy and financial. All sectors were higher with healthcare the worst performer. Weaker than expected housing data weighed on stock prices, but yields rebounded after the 10-year moved below the 2.40% for the first time in 2-years. Crude oil prices rose nearly 2% putting upward pressure on Energy shares. Apple shares were under pressure after a Judge found that the company infringed on a Qualcom patent. Lyft announced that it now expects to price its IPO on Thursday above the initial target range.

Weak Housing Data Fails Pressure Yields

US yields flipped mid-day on Tuesday, after initially moving lower following worse than expected Housing Starts Data. The Commerce Department reported that US Housing starts dropped 8.7% to an annual rate of 1.162 million units in February. This was an 8-month low. Building permits fell 1.6% to a rate of 1.296 million units in February. Builing permits are a gauge of future housing starts. Expectations were for housing starts to decline to a pace of 1.213 million units in February.

Single-family homebuilding, which makes up the bulk of the housing market in the US, tumbled 17.0% to a rate of 805,000 units in February, the lowest level since May 2017. Single-family homebuilding fell in all four regions last month. Permits to build single-family homes were unchanged in February. Starts for the volatile multi-family housing segment jumped 17.8% to a rate of 357,000 units in February. Permits for the construction of multi-family homes fell 4.2% to a pace of 475,000 units last month.

Apple Violates Qualcom Patent

A U.S. trade judge found that some iPhones be barred from import as Apple violated a patent held by Qualcomm Inc. The decision from the US International Trade Commission judge means that Apple, which has its iPhones assembled overseas could be barred from selling iPhones that infringe on a Qualcomm patent.

Lyft Prices Shares Above Range

Lyft Inc. is expected to price its IPO above the targeted range on strong demand for the hail rider stock. The price of the stock is expected to be above the previously targeted range of between $62 and $68 a share. While it is unclear what level it will pick when the shares are priced late Thursday, it is more likely to be in the low $70s. That means that Lyft would be valued at more than $23 billion on a fully diluted basis, which was the top end of the range.

Oil prices Rise

Oil prices rallied above $60 per barrel ahead of Wednesday’s inventory report from the Department of Energy. The United States exported 2 million barrels per day of crude oil in 2018. In 2018, U.S. exports rose 846,000 barrels per day year over year. The number of destinations for US crude oil exports also increased from 37 to 42. Volumes by destination changed significantly between the first and second halves of 2018 according to the EIA.