The markets are back in the green but well off the highs after yesterday’s hit on the back of Fed Chair Powell’s comments.  Seven of the 11 sectors in the S&P are in the green.  Consumer Discretionary, thanks in large part to TJ Maxx (TJX), Financials, Real Estate and Technology are among the leaders today.  Consumer Staples, Energy, Health Care, Industrial and Materials lag.  Advancers outpace decliners 1601/1275 on the NYSE and 1424/1236 on the Nasdaq.

Energy was up ahead of the EIA report, but has turned lower.  Total U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased to 423.5 million barrels, up 3.0 million barrels from the previous week.

Refineries were at 87.8% of their capacity last week. 

The Federal Reserve Bank of Richmond’s Survey of Manufacturing Activity for February saw strong growth.  The manufacturing index jumped to 28 from 14 in January.  This was the second highest reading on record, driven by increases in orders, shipments and employment.  Despite having difficulty finding skilled workers, manufacturers saw strength in employment and the average workweek in February.  Manufacturing firms saw growth in both prices paid and received and expect prices to continue to grow “at a faster rate in the near future”.   

•          Shipments surged to 31 from 15
•          Volume of new orders grew to 27 from 16
•          Backlog of orders index jumped to 18 from 5
•          Capacity utilization index climbed to 32 from 13
•          Average workweek index skyrocketed to 28 from 2
•          Wages index dipped to 23 from 24

Housing

Pending Home Sales dropped 4.7% to 104.6 in January, way below consensus of 0.5%, and the lowest since October 2014. The main takeaway is the lack of supply, as stated by NAR chief economist, Lawrence Yun “there’s little doubt last month’s retreat in contract signings occurred because of woefully low supply levels and the sudden increase in mortgage rates.” He added; “With the cost of buying a home getting more expensive and not enough inventory, some prospective buyers are either waiting until listings increase come spring or now having to delay their search entirely to save up for a larger down payment.”

The weakness was nationwide as purchases fell 9% in the Northeast, in Midwest 6.6%, 3.9% in the South and 1.2% in the West.

SPDR S&P Homebuilders ETF (XHB) declined after the report was released and is currently -0.94% to $41.10.