Housing Starts, Fed Meeting Minutes

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Wednesday, Feb. 19. Today’s Stocks On The Contrarian Radar©️ features semiconductor supplier UCTT 0.00%↑ and can be read at the bottom of this page.

State of Play

Stocks moved very little yesterday. The S&P 500 did briefly touch a fresh all-time high but finished unchanged. As we eye our board of indicators for signs of direction at 0650, there isn’t an awful lot to go by either;

• Stock index futures are down a bit, with small caps leading the drop. The Russell 2000 is down 0.5%. S&P 500 and Nasdaq are down 0.2%;

• Commodities aren’t doing much. WTI crude oil is up 1% to trade around $72.50. Copper is unchanged;

• Cryptos are flat. Bitcoin is up 0.7% to trade around $96,300;

• Bonds are seeing a bit of selling. The 10-year yield is up 3 basis points to 4.57% (yields move inversely to prices).

Today’s Known Events

A few earnings to tell you about:

• Fiverr International (FVRR 0.00%↑), the freelance marketplace, issued positive guidance and is rallying overnight, by about 5% at the time of this writing;

• Etsy (ETSY 0.00%↑) and Wingstop (WING 0.00%↑) are due out before the open at 0930;

• Carvana (CVNA 0.00%↑) and Toast (TOST 0.00%↑) are among highlights reporting after the close at 1600;

• Portfolio company Sturm Ruger (RGR 0.00%↑) also reports this evening, presumably around 1700 ET.

Housing starts and building permits are out at 0830. This is the most leading indicator we have of the housing market in the US, under the premise that this is the start of the construction cycle for new homes.

• Economists who were surveyed expect 1.39 million housing starts in January, versus 1.5 million recorded the previous month. There may be a seasonal element as construction slows in the winter months. (Of course December was pretty much a winter month, especially this year, so there is that).

• Building permits, which are less closely followed because they are less of a commitment (of capital and materials, among other things), are expected to clock in at 1.46 million for the month, a bit below the 1.48 million recorded in December.

Jerome Powell at a housing construction site, by author via Grok AI

Minutes from the last Federal Open Market Committee meeting, aka Fed meeting minutes, are out at 1400. Investors will be keen to dissect these for any signs of direction on interest rate policy. The general consensus is that the Fed is unlikely to move anytime soon. Recent Fed speakers appear more committed than usual to talking out of both sides of their mouths and Fed fund futures aren’t pricing in any movement for the next two FOMC meetings, in March and May, respectively.

Fed Governor Philip Jefferson speaks at Vassar College at 1700 this evening. Jefferson is a full FOMC voting member. The event is “free and open to the public” if you happen to find yourself in Poughkeepsie, N.Y.