It may have been modest, but the modest move made by the market last week pushed stocks above a very significant hurdle, which has big implications from here.  In other words, don’t let the small size of last week’s gain fool you – it was a big deal, and may have (read ‘probably did’) reignited the rally that’s been in place since late-2011. Underperformance from the NASDAQ Composite is a slight nag to this breakout (more on that below). And events in Ukraine and elsewhere may also affect the market rally in the short-term.  Finally, there’s an interesting calendar trend in place with March & April for the broad market — see the bottom of this article for details.
We can show you a crystal clear explanation below, but first, let’s dissect last week’s economic numbers.Â
Economic Data
It wasn’t a terribly busy week last week in terms of economic numbers, but some of the data we got was quite important. Â For instance, we rounded out the look at the real estate picture with the latest batch of home price data, and new home sales. Â All in all, it wasn’t bad, giving much-needed hope for the real estate market.
Long story made short, in December, home prices were up.  The Case-Shiller index said home values were up 13.4% year-over-year, while the FHFA said house values grew 0.8% for the month.Â
Granted, those are December’s numbers, and lousy weather could have crimped home prices in January. Â If they did, though, you couldn’t tell it judging from the number of new homes sold in January. Â The Census Bureau says new homes sold at an annual pace of 468,000, well up from December’s clip of 427,000 units.Â
The good news couldn’t have come at a better time. Â As a reminder, the week before, existing home sales fell from a pace of 4.87 million to 4.62 million for January. Â Housing starts fell from a pace of 1.048 million to 888,000, while permits fell from 991,000 to 937,000. Â Yes, we needed a glimmer of hope on the home and construction front, and we got it.
