Yesterday's economic reports provided a mixed picture for the stock market, with some indicators pointing towards potential growth while others suggested continued weakness.
In the UK, the mortgage market saw an increase in mortgage approvals for both house purchases and re-mortgages in February, with 43.5 thousand approvals for house purchases, up from a revised 39.6 thousand in January. However, mortgage lending fell to £0.7 billion, the lowest level since July 2021. This weak demand could be due to inflation and borrowing costs that are pushing buyers out of the housing market. Additionally, demand for new housing is at a historic low, with borrowing not being this low since April 2016. The increase in consumer credit to £1.413 billion in February, following an upwardly revised £1.686 billion increase in January, could provide some support for the housing market, but it's still too early to determine its impact.
In the US, the MBA 30-Year Mortgage Rate fell to 6.45% in the week ending March 24th, the third decline seen recently. Buyers responded to this by increasing their purchase applications. Pending home sales in the US went up 0.8% month-over-month, the third consecutive month of increases, suggesting a potential recovery in the housing market. However, year-over-year pending home sales were still down 21.1% in February, indicating that the housing market is still weak. Improving mortgage rates were attributed to this increase in pending home sales. NAR Chief Economist Lawrence Yun said, "Mortgage rates have improved in recent weeks after the federal government guaranteed the status of most mortgages amidst uncertainty in the financial market. While access to commercial mortgage loans could become increasingly difficult, residential mortgage loans are expected to be more readily available."
The US crude oil stocks change saw inventories fall by 7.489 million barrels in the week ended March 24th, with stocks of gasoline in the United States falling by 2.904 million barrels. This decrease in oil inventories could lead to a rise in oil prices and benefit the energy sector.
Overall, these economic reports suggest a mixed outlook for the stock market, with some positive indicators in the US housing market and the energy sector but weakness in the UK housing market. Investors will need to monitor these indicators carefully in the coming months to determine their impact on the stock market.
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