Financial markets moved into “risk-off” mode late last week after the United States government warned an Iranian attack on Israel was imminent. Equity markets closed sharply lower Friday, while Treasury bonds rallied as investors moved toward safe-haven assets.1 Risk markets are recovering this morning as Israel’s successful air defense against the Iranian attack offers some hope Saturday’s events may not lead to a wider conflict in the Middle East.
This week’s economic calendar includes updated data on the state of the U.S. consumer and housing markets. It’s expected that the retail sales report, out Monday, will post another solid gain of 0.4% as the benefits of strong labor market conditions continue to outweigh the impact of higher consumer borrowing costs.2 Housing starts are set to be released on Tuesday, followed by existing home sales on Thursday.3 Investors will closely watch the existing home sales report for confirmation that last month’s stronger-than-expected sales number may mark the end of the protracted slump in existing home sales. Existing home supply continues to be challenged by homeowners unwilling or unable to walk away from low rate mortgages.
Sources:
1T.Rowe Price – Global Markets Weekly Update; 4/12/24
2,3MarketWatch – U.S. Economic Calendar; as of 4/15/24
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