New Home Sales Beat Expectations, SP500 Tests Session Highs

Key Insights

• New Home Sales are rising for the third month in a row. 
• The housing market is recovering, which is bullish for stocks and other riskier assets. 
• SP500 moved above the 3980 level after the release of the housing market data. 

New Home Sales Grow As Housing Market Recovers

On March 23, U.S. released New Home Sales report, which indicated that New Home Sales increased by 1.1% month-over-month in February, compared to analyst consensus of -4.5%. New Home Sales are rising for the third month in a row.

The housing market is showing signs of life, which is bullish for the economy and financial markets. All housing reports that were released in recent days have significantly exceeded analyst expectations.

Earlier, traders focused on the Initial Jobless Claims report, which showed that 192,000 Americans filed for unemployment benefits in a week.

From a big picture point of view, traders will likely stay focused on the recent Fed decision and comments from Fed Chair Jerome Powell, which have set the tone for the rest of the week.

SP500 Tests Session Highs After New Home Sales Report

SP500 moved above the 3980 level after the release of the New Home Sales data. The rebound in the housing market is bullish for stocks.

U.S. Dollar Index settled near the 102.30 level. The housing market data did not have a significant impact on the dynamics of the American currency as traders remained focused on Treasury yields and Powell’s comments. Interestingly, rising Treasury yields did not provide any support to the U.S. dollar in today’s trading session.

Gold  settled above the $1980 level despite rising Treasury yields and growing risk appetite after the housing market data. Demand for the safe-haven gold remains strong.

For a look at all of today’s economic events, check out our economic calendar.