Live Markets: Monday, Monday: Empire State, homebuilder sentiment

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17/08/2026 17:03

Nasdaq edges green; S&P 500 slips, Dow dips
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U.S. 10-year Treasury yield edges up to ~4.71%
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MONDAY, MONDAY: EMPIRE STATE, HOMEBUILDER SENTIMENT
Factory activity in New York State unexpectedly added some velocity this month.
The New York Fed's Empire State index USEMPM=ECI jumped a tidy 5.0 points to print at 20.6, its highest reading since November 2021, and contradicting the 4.6-point deceleration analysts predicted.
With this the index moves further into positive territory; an Empire State north of zero indicates monthly expansion.
Below the surface, new orders, shipments and employment improved, but supply availability continued to worsen. Delivery times lengthened substantially and inventories declined, according to the press release.
Input and selling prices—inflation predictors—rose and eased, respectively.
"At least some of the upturn in demand this year has reflected a wave of activity intended to get ahead of potential supply chain disruptions linked to the conflict in the Middle East, a support that probably will prove temporary," writes Oliver Allen, senior U.S. economist at Pantheon Macroeconomics. "The order backlog and delivery times components of the Empire State survey both jumped sharply in August, hinting that supply-chain pressures have intensified again as hostilities have resumed."
On Thursday, the Philadelphia Fed will release its Philly Fed manufacturing report, which should help connect the dots regarding Atlantic region factory activity during the month of August.
Pivoting to the housing market, the mood among homebuilders unexpectedly improved from morose to dour this month.
The National Association of Home Builders' USNAHB=ECI housing market index (HMI) surprised to the upside by creeping one point higher to 35, in defiance of economists who expected a one-point deterioration.
Even so, the NAHB dividing line between optimism and pessimism in the sector is 50. The HMI has been wallowing south of 50 in pessimistic territory since May 2024.
"While builder sentiment edged higher in August, builders continue to contend with high construction costs and broader economic uncertainty,” says NAHB Chairman Bill Owens. “Rising gas and diesel prices are pushing up material costs, and spec home building remains weak as many prospective buyers stay on the sidelines."
There's also the fact that the 30-year fixed mortgage rate has been coasting north of 6% since September 2022, according to data from the Mortgage Bankers Association. And would-be buyers' uncertainties aren't exactly being soothed by the ongoing U.S.-Israeli war on Iran, which has delayed the reopening of the Strait of Hormuz and continues to put upward pressure on consumer prices.
NAHB mentioned neither of those factoids in its press release.
(Stephen Culp)
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Opening snapshot https://www.reuters.com/graphics/USA-STOCKS/zjvqglxgxvx/opener.png
Empire State v Philly Fed https://www.reuters.com/graphics/USA-STOCKS/zjpqglxlxpx/empirestate.png
NAHB and building permits https://www.reuters.com/graphics/USA-STOCKS/dwvknmomxpm/nahb.png