Housing stocks faced significant pressure as 30-year fixed mortgage rates climbed above 7% on Thursday. Meanwhile, the energy sector continues to be a standout performer, buoyed by a 12% weekly increase in oil prices. Investors are also closely watching for key inflation data, with the Consumer Price Index due Friday morning.
New York, NY - Investors grappled with rising mortgage rates and anticipated inflation data on Thursday, leading to a downturn in housing stocks while the energy sector continued its upward trend. The 30-year fixed mortgage rate surged past the 7% mark, triggering significant declines in major homebuilders.
Housing Sector Woes: Homebuilders felt the immediate impact of the rising interest rates. Toll Brothers (TOL) shed 1.9%, now standing 21% below its February peak. PulteGroup (PHM) followed suit with a 2% drop, and is down 19% from its February high. Hovnanian Enterprises (HOV) experienced a steeper fall of 2.6%, with its stock price down 30% from a year ago.
Energy Sector Resilience: In contrast, the energy sector remains the sole S&P 500 sector in positive territory for the week, up 1.7%. This strength is largely driven by robust performance in oil prices. Both Brent and West Texas Intermediate crude have climbed approximately 12% this week. Devon Energy (DVN) and Valero (VLO) have been at the forefront of this energy rally, with both stocks gaining around 4% on the week.
Oracle's Mixed Performance: Tech giant Oracle (ORCL) reported earnings that surpassed analyst expectations on Thursday afternoon. While the stock saw a 4% increase in extended trading, it had reached as high as 7% at one point. Despite the post-earnings bump, Oracle's stock remains significantly down, trading 56% below its peak from a year ago.
Inflation Data on the Horizon: Markets are keenly awaiting the release of crucial inflation data. The Consumer Price Index (CPI) will be announced Friday morning at 8:30 a.m. ET, live on "Squawk Box." Economists surveyed by Dow Jones anticipate a 0.4% month-over-month increase in the CPI, with an expected annual inflation rate of 3.4%. Prediction market Kalshi shows a divided sentiment, with 60% of participants betting on the monthly inflation number exceeding 0.3%, and 12% expecting it to surpass the 0.4% forecast.
Kroger's Earnings Preview: Grocery chain Kroger (KR) is set to release its earnings report on Friday morning around 7:30 a.m. The company's stock has seen a decline of over 11% in the past three months and is currently 25% lower than its March high.
