Housing Returns to Growth Giving Powell a Dilemma

Market Moves You Need to See Housing Returns to Growth Giving Powell a Dilemma [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Housing Returns to Growth Giving Powell a Dilemma [Housing Returns to Growth Giving Powell a Dilemma]Image: Bigstock This is Tracey Ryniec, Senior Stock Strategist and Editor of the Insider Trader and Value Investor portfolios, filling in for Kevin Matras for another day. He will be back tomorrow. The stock market bulls are making it easy right now as the S&P 500 closed at another new record high yesterday as big tech stepped in to lead the market for the second session in a row. Housing Returns to Growth It helped that housing provided a nice bullish catalyst. Housing has been in a recession for about 2 years, as sales and building slumped when the Fed started aggressively raising interest rates in the spring of 2022. Higher rates meant higher mortgage rates and this ground home buying to nearly a halt in 2022 when rates spiked above 7%. But with unemployment remaining under 4.0%, home buyers are still working, and they still want to buy. They are making the numbers work with assistance from the homebuilders who have been providing mortgage rate buy down incentives as well as cutting prices in some markets. Buyers have adjusted. Yesterday's housing starts and permit data for February indicates that the housing recession may now be over. The homebuilders have been reporting that there are more buyers and more orders this spring season and that is showing up in the data. Permits were up 1% to the highest level since May 2022. Starts were up 11.6% to the highest level since Apr 2022, which is just after the Fed started raising rates. Investment in residential building has now rebounded, after contracting for 9 consecutive quarters. It is no longer a drag on GDP and may even start contributing by this summer. This is good news for a bunch of ancillary industries, including banks with their mortgage businesses, furniture retailers and even appliance and deck manufacturers. Will manufacturing, which has also been in a recession, be the next to turnaround? The ISM for Manufacturing has been quietly rising back to towards that 50 level. Any reading over 50 indicates growth. Here Comes Chairman Powell It's no wonder that many are starting to question whether the Fed will be able to cut at all this year. Chairman Powell is on deck today with the FOMC statement at 2 PM ET and the press conference to follow at 2:30 PM ET. Will he be more cautious about possible cuts? All of Wall Street will be watching the press conference today. It's going to be a market mover. But will it work in favor of the stock bulls? They are still in charge of this stock market. All we've seen in the last few weeks is a few days of a breather before the bulls return. I wouldn't bet against the bulls. It's been a pleasure this week. Regards, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [See ALL Zacks' Long-Term Picks for Only $1]( Confidently navigate today's market with Zacks' private investment recommendations. These picks are based on the system that has more than doubled the market since 1988 (including bear markets) and pointed investors to 32 double- and triple-digit winners last year alone. Starting today, for one month, you can follow these exclusive portfolios in real time from the best stocks under $10 to Warren Buffett-style value plays to high-paying dividend stocks. Total cost $1. No gimmicks. 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