Gloomy Tuesday: JOLTS, consumer confidence, home prices, trade gap

• Main US indexes rise; Dow, up ~0.7%, leads
• Materials lead S&P 500 sector gainers; Energy weakest group
• Euro STOXX 600 index up ~0.4%
• Dollar ~flat; bitcoin rises; gold off; crude down ~2.5%
• US 10-Year Treasury yield falls to ~4.17%

GLOOMY TUESDAY: JOLTS, CONSUMER CONFIDENCE, HOME PRICES, TRADE GAP

A spate of generally gloomy data on Tuesday, including a record trade deficit and the bleakest consumer expectations reading in 13 and-a-half years.

Job openings in the United States decreased by 2.5% in March to 7.192 million, according to the Labor Department's Job Openings and Labor Turnover Survey (JOLTS) USJOLT=ECI.

The decrease was unexpected; economists expected that number to hold firm, at 7.480 million.

The JOLTS report, which tracks labor market churn, also showed an uptick in the number of hires and quits, while layoffs and discharges slowed down.

The data "showed some cooling of labor-market conditions, but it wasn't weak enough to bring forward our rate-cut expectations as the Federal Reserve will be monitoring the impact of tariffs on inflation," writes Nancy Vanden Houten, lead U.S. economist at Oxford Economics.

Next, the mood of the U.S. consumer is more dour this month than it's been in years, according to the Conference Board (CB).

CB's consumer confidence index USCONC=ECI plunged 7.9 points to 86.0, its fifth straight monthly decline and the lowest reading since August 2020.

Digging deeper, survey participants' assessment of present conditions worsened by 0.7%, while near-term expectations plummeted 18.7% to their most pessimistic level since October 2011 and well below the threshold associated with oncoming recession.

"Consumer confidence declined for a fifth consecutive month in April, falling to levels not seen since the onset of the COVID pandemic," says Stephanie Guichard, CB's senior economist. "In addition, expectations about future income prospects turned clearly negative for the first time in five years, suggesting that concerns about the economy have now spread to consumers worrying about their own personal situations."

Data geeks will remember that the gap between present situation and expectations begins to yawn ever-wider - as seen in the graphic below - it's often a harbinger of the "R" word.

Switching to housing, home prices across major U.S. cities rose by 0.4% in February, according to the Case-Shiller 20-city composite USSHPQ=ECI.

It was a reprint of January's increase and inline with consensus.

Year-over-year, the 20-city composite posted a 4.5% gain. It was cooler than January's 4.7% reading, which analysts expected to be repeated in today's report.

"Even with mortgage rates remaining in the mid-6% range and affordability challenges lingering, home prices have shown notable resilience," said Nicholas Godec, Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices. "Buyer demand has certainly cooled compared to the frenzied pace of prior years, but limited housing supply continues to underpin prices in most markets."

Among the cities in the composite, New York and Chicago once again led the year-over-year gainers, rising 7.7% and 7.0%, respectively. Alas, poor Tampa was once again the sole loser, with home prices down 1.5% compared with a year ago.

And finally, the Commerce Department released its advance take on goods trade balance USGBAL=ECI and wholesale inventories USAWIN=ECI for March.

The gap between the value of goods imported to the United States and those exported abroad widened by 9.6% to $161.99 billion last month - an all-time record.

"We suppose that companies started importing goods for stockpiles against expected tariffs by the Trump administration," says Carl Weinberg, chief economist at High Frequency Economics, who adds that the record deficit "is not good for markets that are already in a bad mood on tariff news."

The value of goods stacked in the warehouses of U.S. wholesalers grew by 0.5%, a repeat of February's upwardly revised gain.

(Stephen Culp)

JOLTS

Consumer confidence

Case Shiller and mortgage demand

Goods trade balance and GDP