October Sees 1.9% Surge in Housing Starts, Exceeds Analyst Projections

SP500 futures retreated from earlier highs during premarket trading due to an increase in Treasury yields.

Highlights

• In October, there was a 1.1% month-over-month growth in Building Permits.
• Housing Starts saw a 1.9% increase.
• Following the release of the positive reports, Treasury yields have begun to rise.

On November 17, the U.S. released the Building Permits report for October, which indicated a 1.1% month-over-month increase, surpassing the analyst consensus of -1.5%.

In a broader context, Building Permits have generally been on an upward trend since reaching local lows in April 2023.

Additionally, traders reviewed the Housing Starts report, which revealed a 1.9% month-over-month growth in October, exceeding the analyst consensus of -1.3%.

Both reports surpassed analyst expectations, which is somewhat unexpected given the current interest rate environment. It's worth noting that the NAHB Housing Market Index report from yesterday indicated a decline in builder confidence.

Furthermore, the U.S. Dollar Index is attempting to move away from session lows following the release of the better-than-expected housing market data. Treasury yields have also begun to rebound, providing additional support to the American currency.

Meanwhile, the price of gold is striving to settle above the $1985 level, with traders focusing on the longer-term Fed policy outlook and preparing for potential rate cuts in the first half of next year.

In premarket trading, SP500 futures pulled back from session highs. The strong reports could be interpreted as bearish, as a robust housing market may lead to a more hawkish Fed. However, it remains to be seen whether stock traders will prioritize these reports, as the general market sentiment is currently very bullish.