It’s been an eventful week for the stock market — thankfully in a good way. After last week’s near-meltdown, there was palpable fear that the highs of 2024 had already come and gone. And while we haven’t taken out new highs on any of the major indexes, we’re certainly pointed in the right direction.

This morning, we see a little run-off from the big upswing the past two sessions. The Dow is -55 points and this hour, the S&P 500 -20 and the Nasdaq -95 points. Bond yields on the 10-year and 2-year remain inverted — and the 2-year is now back above 4% slightly — but the longer trend here is still anticipating lower rates.

From now until Personal Consumption Expenditures (PCE) come out two weeks from this morning, we’ll be relatively dormant on both economic prints and Q2 earnings. NVIDIA ((NVDA Quick QuoteNVDA - Free Report) , which reports a week from next Wednesday, while vastly important, exists somewhat on an earnings island unto itself.

Housing Data Shrinks Further in July

This morning, Housing Starts for July came in beneath expectations. Coming in at only 1.24 million seasonally adjusted, annualized units is the lightest print we’ve seen since way back in May 2020. Expectations had been for 1.34 million new starts, with June’s number revised down from 1.35 million to 1.33 million units.

Building Permits, seen as a proxy for future starts, also was the lowest we’ve seen since the pandemic: 1.40 million is the slimmest figure since June 2020 and below the 1.42 million seasonally adjusted, annualized units. This is below the unrevised June read of 1.45 million.

Keep in mind these surveys happened around the time Hurricane Debby was bearing down on Florida and elsewhere in the Southeast U.S., where a large portion of new homebuilding business occurs. Now Hurricane Ernesto is busy disrupting construction in the region; late summer is typically a rough time for areas prone to hurricane season.

All the downward shift in housing has been on the Single Family side, which fell more than -14% last month. Multi-Family was slightly higher, but with already such abundant supply, we don’t expect this segment to drive new housing in the near future.

Borrowing costs remained high last month. The silver lining here is that an interest rate cut next month, as expected, would necessarily offer some relief among new housing construction. Not only for borrowing costs for the homebuilders themselves, but in terms of mortgage rates for prospective homebuyers.

Finally, an antitrust settlement among multi-listing services (MLS) promises to adjust compensation for mortgage brokers, which may lead to lower agent commissions. While professionals in the industry might be expected to feel the brunt of this agreement, it would help further lower lending costs for homebuyers.