Investors received bullish signals on the economy last week. Small business optimism soared in April to its highest level in six years as companies plan to hire. Housing starts jumped more than 13 percent in April, fueled by multi-family homes, and new claims for jobless benefits hit a six year low to 297,000, showing strength in the labor market. In the week ahead, we expect earnings reports from Home Depot, Target and Sears.
We’ll gain insight on the health of the economy with minutes from the April Federal Reserve meeting, when the FED cut its bond buying program by another $10 billion per month and left its key interest rate, which affects mortgage, credit and student loan rates unchanged.
We’ll get two key reads on housing, starting with the April existing home sales report. In March, sales of previously owned homes dipped slightly to its lowest level in 18 months; however, the median sales price increased by more than five percent compared to a year ago to $198,000.
We’ll also get April new home sales report. In March, sales plunged 14.5 percent, hitting its lowest level since July. But the median price of a new home soared by nearly 13 percent compared to a year ago, a record high $290,000.