Economic Calendar Puts Focus on Home Price and Consumer Data
0h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
economic-calendarcase-shiller-index
Fazen Markets Editorial Desk
Collective editorial team · methodology
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The U.S. economic calendar for Tuesday, May 28, 2024, features the release of the S&P CoreLogic Case-Shiller 20-City Home Price Index for March and the Conference Board's Consumer Confidence survey for May. These releases will provide critical insight into the health of the housing market and the American consumer's sentiment amidst persistent inflation and elevated interest rates. The data arrives during a holiday-shortened trading week, potentially amplifying its impact on market direction.
The Federal Reserve has maintained its benchmark interest rate in a 5.25%-5.50% target range for nearly a year, its highest level in over two decades. This sustained monetary tightening has significantly cooled the previously red-hot housing market, though prices have proven surprisingly resilient. The last major housing data release, April's existing home sales, showed a surprise contraction of 1.9% month-over-month, highlighting ongoing affordability challenges. The March Case-Shiller data will reveal whether this trend of high prices and low transaction volume persisted as the spring selling season began.
Consumer confidence has become a key bellwether for the economy's ability to achieve a soft landing. In April, the index fell to 97.0, its lowest reading since July 2022, driven by concerns over the outlook for business conditions and the labor market. A further decline in May would signal growing consumer pessimism, potentially foreshadowing a pullback in spending, which accounts for nearly 70% of U.S. economic activity. This data is critical for the Federal Open Market Committee (FOMC) as it debates the timing of future rate cuts.
The February S&P CoreLogic Case-Shiller 20-City Composite Index recorded a 7.3% year-over-year gain, accelerating from the 6.6% increase seen in January. On a monthly basis, prices rose 0.55% from January to February. Analysts project the March data to show a slight deceleration in the annual pace to approximately 7.0%, with a modest monthly increase of 0.3%. The 10-City Composite rose 8.0% annually in February, while the National Home Price Index increased by 6.4%.
| Metric | February 2024 (Actual) | March 2024 (Estimate) |
|---|---|---|
| 20-City Composite (YoY) | +7.3% | +7.0% |
| 20-City Composite (MoM) | +0.55% | +0.3% |
The Conference Board Consumer Confidence Index is forecast to decline to 96.5 in May from 97.0 in April. The Present Situation Index, which measures current conditions, fell to 142.9 in April. The Expectations Index, which reflects the six-month outlook, dropped to 66.4, remaining below the 80 level that historically signals an impending recession. This data will be scrutinized against the University of Michigan's final May sentiment reading, which showed a dip to 69.1.
A stronger-than-expected home price print would signal underlying demand continues to outpace supply, a bullish signal for homebuilder stocks like Lennar (LEN) and D.R. Horton (DHI). However, it also implies the housing market is adapting to higher rates, potentially giving the Fed more room to delay rate cuts. This scenario would be a net negative for rate-sensitive growth stocks in the technology sector, as represented by the Invesco QQQ Trust (QQQ). Mortgage real estate investment trusts (mREITs) such as Annaly Capital Management (NLY) face continued pressure from a steep yield curve and high funding costs.
The primary risk to the analysis is that a resilient housing market, while positive for builders, exacerbates shelter inflation, which is a significant component of the Consumer Price Index. This could force the Fed to maintain a hawkish stance for longer than markets currently anticipate, increasing the risk of a policy mistake that triggers a broader economic slowdown. Trading data from the Chicago Mercantile Exchange shows futures traders have recently pared back bets on a September rate cut, with the probability falling from 70% to near 50%.
The next major catalyst for markets will be the Personal Consumption Expenditures (PCE) Price Index report on Friday, May 31. As the Fed's preferred inflation gauge, this data will be paramount in shaping the June FOMC meeting's tone. Traders will watch the core PCE figure, which is expected to hold steady at a 2.8% annual rate. A surprise to the upside would likely trigger a sell-off in bonds and a rally in the U.S. Dollar Index (DXY).
The following week features the May jobs report on June 7. Economists project nonfarm payrolls growth of around 180,000 and an unemployment rate steady at 3.9%. For equity markets, the 50-day moving average for the S&P 500 (SPX) near 5,150 points serves as a key technical support level. A sustained break below this level, coupled with weak data, could signal a deeper correction.
The S&P CoreLogic Case-Shiller Home Price Index is scheduled for release at 9:00 AM Eastern Time on Tuesday. The data is published with a two-month lag, meaning the May 28 release covers price movements from March. The Conference Board Consumer Confidence survey for May is released later the same day at 10:00 AM Eastern Time, providing a more timely snapshot of sentiment.
The Case-Shiller Index is a repeat-sales index, meaning it tracks value changes for the same property over time, which helps control for quality differences. This contrasts with median price reports from the National Association of Realtors, which can be skewed by the mix of homes sold in a given month. Case-Shiller is widely considered the leading benchmark for U.S. home price trends, though its two-month lag is a limitation.
Consumer confidence is a leading indicator for retail sales, which drive a majority of U.S. economic growth. A sustained drop in confidence can foreshadow weaker corporate earnings for consumer discretionary companies like retailers and automakers. Conversely, rising confidence often correlates with increased consumer spending and stronger economic performance, which is generally supportive of equity prices across the board, particularly for sectors like consumer discretionary (XLY) and financials (XLF).
Tuesday's data will test the resilience of the U.S. consumer and housing market against the backdrop of the highest interest rates in decades.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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