All of the major U.S. equity indices retreated from yesterday’s rally to open quite deep in the red; however it looks as though overall the market will still round out Q1-2015 in the green. Europe is experiencing some substantial woes today as the European Central Bank’s (ECB) one-trillion-euro stimulus program was noted as substantially weakening its currency since its inception. Additionally, oil prices took another dive today on the potential that Iran (also a member of OPEC) could reach a deal with six world powers on its nuclear program and could allow Tehran to sell more of its oil to an already saturated market.

Today’s session brought about some very mixed domestic economic data, some of which should have brought the market higher but to no avail. This morning, Case-Shiller released its composite 20-city home price index, which noted that prices firmed in January rising by 0.9% following a 0.9% rise in December and a 0.8% rise in November. It’s worth noting that this is the strongest streak for the Case-Shiller index since late 2013. On a year-over-year basis (noted in the chart below) prices remain on the soft side, up only 4.6% in January and only slightly higher from the prior two months. All regions showed gains for the month, but were primarily led by locations on the West Coast. There were also particularly strong gains in Boston, Chicago, Minneapolis, and Charlotte. Unadjusted data is also followed in this report and shows no monthly change, which reflects January's severe winter weather which especially holds down housing activity. However on a year-on-year basis, where monthly effects are limited, the data tells the same story with the adjusted and unadjusted rate at +4.6%. One major positive for homeowner confidence and consumer spending is the fact that lower home inventories are being driven by higher demand, which in turn is raising prices. This report provides yet another tick in the positive column for housing data this month, and shows that housing activity is gaining momentum into the spring.

As with the other major Fed Districts during the month of March, Chicago’s manufacturing sector remains in a lull. The Chicago purchasing managers index (PMI) remained at a sub-50 level of 46.3 in March after dropping to 45.8 in February. On a quarterly basis, 2015 is off to a weak start with the index’s three-month average at 50.5 which is steeply lower than the 61.3 reading in Q4-2014. This is the weakest quarterly reading for the Chicago PMI since Q3-2009. The companies surveyed cited bad weather and slow-to-recover business activity due to the West Coast port shutdown. However, many see orders picking up substantially for the next quarter. We note as well that the Chicago report covers both manufacturing and non-manufacturing sectors, so it is quite volatile and therefore does not provide the best representation of the economy as a whole.

Lastly, although consumer spending may have been flat as of late, consumer confidence is on fire. According to the Conference Board, consumer confidence jumped to a reading of 101.3 in March from an upwardly revised 98.8 in February. The March reading is not far off from January’s 7.5-year high of 103.8. Most encouraging is the fact that the expectations component rose by a whopping 6 points in March to 96.0.  This is the best reading for expectations since February 2011 and is directly reflective of gains in income and improvement in the jobs market. One negative reading for the index, however, is the present situation component which declined to 109.1 and reflects weakness in the mentality that jobs are currently harder to get. This is a marginal negative for the March employment report, which will be released later this week. However in current conditions, those describing conditions as bad came in at 19.4% of those surveyed, and were clearly well outnumbered by those who described conditions as good, at 26.7%. Another notable negative in the report, which seems to be contradicted by earlier housing data, notes that there’s a sizable decline in those planning to buy a house in the next six months. However, there was a boost in those planning to buy a car, which may bode well for the upcoming auto sales report. Overall the important components showed a sizable recovery in March over the prior month, and although consumers have yet to pick up the spending, the boost in their spirits is very encouraging.