Key Insights
- New Home Sales grew by 7.2% in January despite high interest rates.
- Michigan Consumer Sentiment increased from 64.9 in December to 67 in January.
- S&P 500 tested new lows amid rate hike fears.
New Home Sales Exceed Analyst Estimates
On February 24, U.S. released New Home Sales report, which indicated that New Home Sales increased by 7.2% month-over-month in January. Analysts expected that New Home Sales would grow by just 0.4%, so the report exceeded analyst expectations. It should be noted that New Home Sales are growing for the second month in a row.
US Dollar Index Price Forecast
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See all US Dollar Index forecastsTraders also had a chance to take a look at the final reading of the Michigan Consumer Sentiment report for February. The report showed that Consumer Sentiment increased from 64.9 in December to 67 in January, compared to analyst consensus of 66.4.
The better-than-expected reports highlighted the strength of the U.S. economy. Earlier, U.S. reported that PCE Price Index grew from 5.3% in December to 5.4% in January, while analysts expected that it would decline to 4.8%. Today, all economic reports showed that the Fed should be more aggressive to fight inflation.
Stocks Test New Lows
S&P 500 moved below the 3950 level after the release of the New Home Sales and Michigan Consumer Sentiment reports. Traders bet that Fed will be forced to raise rates at the upcoming meetings.
Not surprisingly, the U.S. Dollar Index has settled at multi-week highs as aggressive Fed is bullish for the American currency.
Gold found itself under pressure and moved towards the $1810 level as traders focused on strong dollar and rising Treasury yields.
For a look at all of today’s economic events, check out our economic calendar.