In This Article:
Friday, May 16, 2025
We close out another trading week today with the lion’s share of Q1 earnings season already reported, a vast collection of economic data (mostly from yesterday), but with an outlook on tariffs and inflation that remains murky. This hasn’t stopped investors from taking an optimistic stance, and as a result, we’ve seen an uncommonly rapid return to pre-“Liberation Day” levels in stock market indexes. The S&P 500 is looking for its fifth-straight up-day.
The Dow is currently up +165 points, the S&P 500 is +25 and the Nasdaq is +90 points. All major indexes, including the small-cap Russell 2000, are up over the past five days of trading, from +1.8% (Dow) to +4.7% (Nasdaq). For the bounce-back past month of trading, the range is +6.7% (Dow) to +16.8% (Nasdaq). The S&P 500 and Nasdaq are both up year to date, while the Dow and Russell 2000 still have some ground to make up.
Housing Starts and Building Permits Mixed for April
We’re seeing in-line Housing Starts for the month of April, with 1.36 million seasonally adjusted, annualized units reported. This is above the upwardly revised 1.34 million from the prior month, and the highest level since 1.49 million units in February. Building Permits came in on the light side: 1.41 million seasonally adjusted, annualized units from the expected 1.45 million and a -4.7% drop — the biggest fall since March 2024.
These headlines, however, obscure the real story here: single-family units are way down and multi-family units are way up. Single-family units are down -2% month over month and -12% year over year. Mortgage rates in April were over 7% (they are just under 7% currently), with prospective buyers remaining on the sidelines.
In fact, more rental demand is pushing Multi-family units in the opposite direction: +11% month over month and +28.8% year over year. In recent months, homebuilders had grown concerned that they were overproducing supply in the Multi-family space, but current conditions are that younger Americans are balking on traditional household formations and opting to rent instead. As a result, we’re currently seeing a record number of new Multi-family units being built.
Imports & Exports Positive in April
Despite expectations for negative headlines on both Import and Export prices last month, we see +0.1% on both metrics this morning. Import Prices had been expected to come in -0.4% for April — where March’s revision this morning now resides — but, despite the blanket +10% tariffs installed by the White House in early April, demand has “trumped” this development. Year over year, imports are also +0.1%.
Export Prices stayed consistent with March’s +0.1%, now officially constituting the fifth-straight positive month. Year over year, exports are +2% — the lowest rate since December of last year. These numbers do not include tariff prices, but may reflect market behavior based on the new tariff reality.