Weekly Economic Review | April 24, 2023 | Stephens

Who We Are

What We Do

We provide investment banking, research, sales and trading, asset and wealth management, public finance, insurance, private capital, and family office services.

About Us

We are a family-owned financial services firm that values client relationships, long-term stability, and supporting the communities where we live and work.

The Stephens Story

The idea of family defines our culture, because each of us knows that our reputation is on the line as if our own name was on the door.

Leadership

Our reputation as a leading independent financial services firm is built on the stability of our longstanding and highly experienced senior executives.

Impact Initiatives

We are committed to corporate philanthropy; economic and financial literacy advocacy; and diversity, equity, and inclusion initiatives.

Our Brand Ambassadors

Stephens is proud to sponsor the PGA TOUR, LPGA Tour, and PGA TOUR Champions careers, as well as applaud the philanthropic endeavors, of our Brand Ambassadors.

Stephens & Williams Racing Partnership

Stephens is the official investment banking partner of Williams Racing, one of the most winning teams in F1 history. We share that tradition of success.

Making Connections

We host many highly informative meetings each year with clients, industry decision makers, and thought leaders across the U.S. and in Europe.

Our Businesses

Capital Management

We provide fiduciary investment strategies to public-and private-sector institutional clients through asset allocation, consulting, and retirement services.

Fixed Income Sales & Trading

Decades of proven performance and experience in providing tailored fixed income trading and underwriting services to major municipal and corporate issuers.

Institutional Equities and Research

Proven industry-leading research, global market insights, and client-focused execution.

Insurance

Customized risk management, property & casualty, executive strategies and employee benefits solutions that protect our clients over the long term.

Investment Banking

We assist companies with accessing capital through innovative advisory and execution services that help firms achieve their strategic goals.

Private Capital

We have been a trusted and reliable source of capital for private companies for over 70 years.

Private Wealth Management

Our experienced Private Client Group professionals develop customized investment strategies to help clients achieve their financial goals.

Public Finance

We are a trusted municipal advisor with proven expertise in public financings. We also work with clients in negotiated and competitive municipal underwritings.

Market Trends

Weekly Economic Review | April 24, 2023

Apr 24, 2023

Economic Review

The Labor Department reported that initial jobless claims rose again last week, continuing their gradual climb since the beginning of the year. Continuing claims have reached their highest level since November of 2021. The pickup in claims adds to signs that the labor market is beginning to lose momentum. Claims in regular state programs climbed 5,000 to 245,000 for the week ending April 15th. The four-week moving average edged lower to 239,750 from 240,250 the prior week. Continuing claims, which include people who have received unemployment benefits for a week or more, rose 61,000 to 1.865 million for the week ending April 8th.

The New York Federal Reserve reported the Empire State Manufacturing Index, which is one of the first signals for factory sector activity, unexpectedly expanded in April for the first time in five months. The report showed both new orders and shipments snapped back from declines in March. The index recorded a positive 10.8 in April after a negative 24.6 reading in March. New orders recorded a positive 25.1 in April after -21.7 reading in March and Shipments jumped to 23.9 after a -13.4 reading last month. Readings above zero signal expansion in New York, northern New Jersey, and southern Connecticut.

The National Association of Home Builders/Wells Fargo reported housing sentiment climbed in April for the fourth straight month. A very limited resale inventory helped drive demand for new houses. Currently one-third of housing inventory is new construction, compared to historical norms of a little more than 10%. The improvement so far in 2023 comes after a year-long rout in 2022. The index of builder sentiment climbed to 45 in April from 44 in March. The index recorded an 84 in December of 2021.

The Commerce Department reported that housing starts edged lower in March as a pullback in multifamily projects more than offset a pickup in construction of single-family homes. Housing starts remain well below completions and the total number of units under construction continues to edge lower. With backlogs being cleared, contractors are not going to need as many workers in the months ahead. Housing starts fell 0.8% in March to a 1,420,000 annualized rate following February’s 1,432,000 pace. Single-family starts increased 2.7% in March with multi-family starts down 5.9%. Building permits, a gauge of future construction, declined 8.8% in March to a 1,413,000 pace.

The Fed released the latest rendition of the Beige Book, which is based on information collected through April 10, 2023. This report is published eight times each year. The report showed economic activity was relatively unchanged since the previous report. Consumer spending was generally seen as flat to down slightly amid continued reports of moderate price growth. Travel and tourism picked up across much of the country. Manufacturing activity was widely reported as flat or down. Employment growth moderated with several Districts reporting a slower pace of growth. Overall price levels rose moderately during this reporting period, though the rate of price increases appeared to be slowing.

The National Association of Realtors reported that existing home sales decreased in March for the thirteen time in fourteen months. Residential real estate remains constrained by the Federal Reserve’s aggressive policy tightening campaign that sent mortgage rates soaring last year. Higher mortgage rates, tightening credit standards and very low inventory will keep house transactions down for the foreseeable future. Contract closings, which usually occur a month or two after a contract is signed decreased 2.4% in March to a 4.44 million pace after surging 13.8% in February. The median selling price increased to $375,700 from $363,600 in March.

The Conference Board reported the index of leading economic indicators declined 1.2% in March, the thirteenth straight drop. The loss was led by a decline in building permits, consumer expectations and ISM New Orders. The index of U.S. leading indicators is a gauge of the economic outlook for the next three to six months. The coincident index, a gauge of current economic activity, climbed 0.2% in March after gaining 0.2% in February.

The Mortgage Bankers Association reported the MBA index of mortgage applications declined last week after mortgage rates climbed from two-month lows. The index fell 8.8% for the week ending April 14th. Refinancing applications decreased 5.8% to 449.8 from 477.5 the prior week. Home purchase mortgage applications fell 10.0% to 161.6. Refinancing made up 27.6% of applications with an average loan size of $262,400, while purchases average loan size was $437,700. The average contract rate on a 30-year fixed-rate mortgage increased to 6.43% from 6.30% last week. The average contract rate was as high as 7.16% in October of last year.

BOND MARKET REVIEW

Rates climbed last week as the banking sector stabilized and Fed policymakers made statements that the inflation fight continues. Friday’s yields for the 2-, 5-, 10- & 30-year Treasury benchmarks securities were 4.18%, 3.66%, 3.57% and 3.78%. The 2yr/5yr, 5yr/10yr, 10yr/30yr and 2yr/30yr spreads closed at -52, -9, 21, and -40 basis points respectively.

Economic/Events Calendar

Monday

April 24

Mar Chicago Fed Nat Activity Index (-0.20)

7:30 Central

Tuesday

April 25

Feb FHFA House Price Index (-0.2%)

8:00 Central

Feb S&P CoreLogic CS 20-City Index (-0.40%)

8:00 Central

Mar New Home Sales (633k)

9:00 Central

Apr Conf Board Consumer Confidence (104.0)

9:00 Central

Wednesday

April 26

Apr 21st MBA Mortgage Applications

6:00 Central

Mar Durable Goods Orders (0.8%)

7:30 Central

Mar Durables Ex Transportation (-0.2%)

7:30 Central

Mar Cap Goods Orders Nondef Ex Air (-0.1%)

7:30 Central

Mar Wholesale Inventories (0.1%)

7:30 Central

Mar Retail Inventories (0.2%)

7:30 Central

7

Mar Goods Trade Balance (-$90.0b)

7:30 Central

9:00 C

Thursday

April 27

April 22nd Initial Jobless Claims (250k)

7:30 Central

1st Qtr Gross Domestic Product (2.0%)

7:30 Central

1st Qtr GDP Price Index (3.7%)

7:30 Central

1st Qtr Personal Consumption (4.3%)

7:30 Central

Mar Pending Home Sales (0.7%)

9:00 Central

Friday

April 28

Mar Personal Income (0.2%)

7:30 Central

Mar Personal Spending (-0.1%)

7:30 Central

Mar PCE Deflator-YOY (4.1%)

7:30 Central

1st Qtr Employment Cost Index (1.1%)

7:30 Central

Apr University of Michigan Sentiment (63.5)

9:00 Central

About the Expert

Troy Clark

Senior Vice President, Fixed Income Strategist, Fixed Income Sales & Trading

Mr. Clark has been in investment banking since 1983. He is a Chartered Financial Analyst. He has been a fixed income strategist at Stephens Inc. since 1996, developing investment strategies, policies and procedures for institutions consistent with overall asset/liability management.

Read full bio
Source: Bloomberg L.P.
  1. This report has been prepared solely for informative purposes as of its stated date and is not a solicitation, or an offer, to buy or sell any security. All expressions of opinion reflect the judgment of the individual expressing the opinion and are subject to change. This report does not purport to be a complete description of the markets or developments referred to in the material. Information included in the report was obtained from internal and external sources which we consider reliable, but we have not independently verified such information and do not guarantee that it is accurate or complete. Prices, yields, and availability are subject to change with the market. There is no assurance any forward looking statements will be realized or any of the trends mentioned will continue. Nothing in this report is intended, or should be construed, as legal, accounting, regulatory or tax advice. Additional information available upon request. 2023 Stephens Inc., Member NYSE/SIPC.