At midday, the major indices are in the green.  Only 2 S&P 500 sectors are in the red.  The best performing sectors are Industrials and Materials, which are being bolstered by the better-than-expected initial claims report, as well as hopes for an infrastructure deal.  The Senate Republicans have offered a new proposal with a price target of  $928 billion, which is still far below Biden’s $1.7 trillion plan, but is showing a willingness to reach a bipartisan deal.

Breadth is positive, advancers are outpacing declines, and new 52-week highs are blowing away new lows.

Jobs

On the economic front, initial jobless claims fell by 38,000 to 406,000 beating expectations for 425,000 and is a new pandemic low. As Covid-19 cases continue to decline and government and business restrictions are lifted, filling jobs has become more and more difficult.  As such, several states had withdrawn from the federal unemployment benefit programs.

Housing

Annually, pending home sales continue to soar, up 51.7% in April. This is the largest increase ever. All 4 U.S. regions were up y/y.  However, on a monthly basis, pending home sales declined 4.4% versus estimates for an increase of 0.8%. The only region to book a gain was the Midwest. 

As Covid-19 restrictions are being lifted, the rush to the suburbs is waning a bit. Plus, as the eviction moratorium ends and more sellers come out of forbearance, supply should begin to pick up, especially for lower priced housing. According to Lawrence Yun, the chief economist at NAR, "Contract signings are approaching pre-pandemic levels after the big surge due to the lack of sufficient supply of affordable homes."

Speaking of forbearance and loan modifications, the CEO’s from several large banks are being grilled by the House Financial Service Committee on this topic as we speak.