ETF

The yield on the 10-year note ended March 17, 2023 at 3.39%, the two-year note ended at 3.81%, and the 30-year at 3.60%.

Yesterday, the U.S. Census Bureau and the Department of Housing and Urban Development published their February findings for new residential housing starts and building permits. Over the long haul, the two series offer a compelling study of trends in residential real estate. Here is an overlay of the two series since the 1959 inception of the starts and oermits data, which was tracked beginning a year later.

The latest Conference Board Leading Economic Index (LEI) for February was down 0.3% to 110.0 from January's final figure of 110.3, marking the 11th consecutive MoM decline. Today's reading was consistent with the Investing.com forecast.

Month-over-month nominal retail sales in January were down 0.4% and up 5.4% YoY. However after adjusting for inflation, real retail sales decreased by 0.8% and were down 0.6% YoY.

February's ZHVI came in at $327,514, practically unchanged from January and up 6.76% from February 2022. After adjusting for inflation, the real figures are -0.71% month-over-month and -1.16% year-over-year.

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for February new residential building permits. The latest reading of 1.524M crushed the Investing.com forecast of 1.340M. Building permits climbed 13.82% from January's revised figure of 1.339M, the largest monthly gain since July 2020.

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for February new residential housing starts. The latest reading of 1.450M was above the Investing.com forecast of 1.310M and is a 9.8% increase from the previous month's revised figure of 1.321M. Housing starts are down 18.4% compared to this time last year.

The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. The latest reading came in better than expected (40) at 44, up 2 from last month, and is the index's highest reading in the last six months.

The Census Bureau's Advance Retail Sales Report for February was released this morning. Headline sales came in slightly below forecast at -0.4% month-over-month. Core sales (ex Autos) came in at -0.1% month-over-month, in line with the forecast.

The headline number for February came in at 90.9, up 0.6 from the previous month, but still below the series average of 98.2.  The index is at the 9th percentile in this series.

The latest job openings and labor turnover summary (JOLTS) report, with data through January, is now available.

The U.S. international trade in goods and services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992 and details U.S. exports and imports of goods and services. The headline number of -$68.2B was better than the -68.9B Investing.com forecast, however it is the largest gap we have seen in the last 3 months.

Take a look at real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq composite since 2000. We've updated this through the February 28, 2023 close.

Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $13,687 for an annualized real return of 6.29%.

The S&P 500 real monthly averages of daily closes peaked in November of 2021 and 2022 was a bear market. Let's examine the past to broaden our understanding of the range of historical trends in market performance.

With the Q4 GDP second estimate and the February close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 140.1%, down from 146.7% the previous quarter.

The moving average for the per-capita light vehicle sales series peaked in 2005. Over 15 years later, it is down 20% from that peak.

The February US services purchasing managers' index (PMI) conducted by S&P Global came in at 50.6 percent, notably up from 46.8 in January and just slightly higher than the Investing.com forecast of 50.5. This morning's reading moves the index into expansion territory after being in contraction for seven months.

The Institute of Supply Management (ISM) has now released its February services purchasing managers' index (PMI). The headline composite index is at 55.1 percent, down 0.1 from 55.2 last month. Today's number came in above the Investing.com forecast of 54.5 percent.

Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations for investment returns. On August 4, 2020, the 10-year Treasury yield hit its all-time low of 0.52%. As of February 28, 2023 it was at 3.92%.

Here is a summary of the four market valuation indicators we update on a monthly basis.

• The Crestmont Research P/E ratio
• The cyclical P/E ratio using the trailing 10-year earnings as the divisor
• The Q ratio, which is the total price of the market divided by its replacement cost
• The relationship of the S&P composite price to a regression trendline

Quick take: Based on the February S&P 500 average of daily closes, the Crestmont P/E of 31.6 is 112% above its arithmetic mean, 130% above its geometric mean, and is at the 96th percentile of this 14-plus-decade series.

Here is the latest update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates, and the index monthly average of daily closes for the past month.

As of February 28, 2023, the 10-year note was 340 basis points above its historic closing low of 0.52%, reached on August 4, 2020.

The Q Ratio is the total price of the market divided by the replacement cost of all its companies. Note: This update includes February close data.

The February S&P Global US Manufacturing PMI™ hit a 3-month high coming in at 47.3, up 0.4 from the final January figure, and slightly worse than the Investing.com forecast of 47.8. This marks the fourth consecutive month in contraction territory, a streak we have not seen since 2020.

Quick take: At the end of February the inflation-adjusted S&P 500 index price was 117% above its long-term trend, up 5% from January.

About the only certainty in the stock market is that, over the long haul, over-performance turns into underperformance and vice versa. Is there a pattern to this movement? Let's apply some simple regression analysis to the question.

Valid until the market close on March 31, 2023.

The S&P 500 closed February with a monthly loss of 2.61%, after a gain of 6.18% in January. At this point, after close on the last day of the month, three of five S&P 500 strategies are signaling "cash" — iShares 7-10 Year Treasury Bond ETF (IEF), Vanguard Real Estate ETF (VNQ), and Invesco DB Commodity Index Tracking Fund (DBC) — up from from last month's single "cash" signal.

The Conference Board released its Consumer Confidence Index ® this morning, with the headline number coming in at 102.9, a decrease of 3.1 from the downwardly revised final reading of 106.0 in January. This month's reading is worse than the Investing.com forecast of 108.5.

With this morning's release of the December S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 0.51% decrease month-over-month (MoM), matching the Investing.com forecast, and a 4.67% increase year-over-year (YoY). After adjusting for inflation, the MoM was reduced to -1.3% and the YoY was reduced to -2.7%.

The Federal Housing Finance Agency (FHFA) has released its U.S. house price index (HPI) for December. U.S. house prices decreased by 0.1% from the previous month. Year-over-year the index is up 6.6% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the index is up 0.1% in December and up 0.6% year-over-year (seasonally adjusted).

Here is an advance preview of the monthly moving averages we track after the close of the last business day of the month.

The National Association of Realtors® (NAR) released the January data for its pending home sales index. According to the NAR, "Pending home sales improved in January for the second consecutive month."