(Bloomberg) — Stocks lost traction at the end of a strong week after a disappointing reading on the housing market, with traders awaiting data on US consumer sentiment.
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Equities fell in early New York trading, with the S&P 500 poised to snap a six-day winning streak. New-home construction in the US fell in July to the lowest level since the aftermath of the pandemic as builders respond to weak demand that’s keeping inventory levels high. Treasuries climbed across the curve. The dollar slipped, on course for a third week of declines, the longest such losing streak in more than five months.
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“Residential investment for the third quarter is off to a very slow start — and will not likely contribute to GDP growth this quarter,” said Jeff Roach at LPL Financial. “Housing prices will likely stay elevated despite a broader economic slowdown. However, we do expect mortgage rates to drop throughout this year as the Federal Reserve starts cutting rates.”
Traders dialed back bets of fast and steep Fed rate cuts other data points this week suggested the economy is far more resilient than markets have expected. Later Friday, Wall Street will wade through a fresh reading on consumer sentiment.
“These numbers could be disappointing,” said Matt Maley at Miller Tabak + Co. “Let’s face it, it’s not like the consumer is suddenly booming again. In other words, the positive news from this week has been that the concerns over a recession have been alleviated to a certain degree. But there’s no question that the economy is still slowing.”
Federal Reserve Bank of Chicago President Austan Goolsbee said the labor market and some leading indicators on the economy are flashing warning signs, adding there are concerns unemployment will continue to rise.
S&P 500 futures dropped 0.5%. The US equity benchmark was still poised for its best week this year. Nvidia Corp. led losses in megacaps. Applied Materials Inc., the largest US maker of chip-manufacturing equipment, slumped…
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