U.S. Home Sales Fall for 12th Month; Canadian Inflation Accelerates

The stock market has come to a close for today, with the S&P 500 falling 2%. In addition, the Nasdaq 100 declined by 2.41%. In the U.S., the most important piece of economic data came in the form of the Existing Home Sales report.

In essence, the housing market continues to deteriorate as January represented the 12th consecutive month of decreasing sales. This is in addition to last week's Building Permits, and Housing Starts reports, which changed 0.1% and -4.5% month-over-month, respectively. Indeed, the increased costs of borrowing have not been kind to potential homeowners.

Taking a look north of the border, Statistics Canada released its inflation numbers for January. Although CPI decreased on a year-over-year basis compared to last month's report, it actually increased month-over-month.

Core CPI came in hotter than expected at 0.3% versus the 0.2% forecast. For reference, it had declined by -0.3% in December. Normal CPI was lower than expected (0.5% vs. 0.7%). Nevertheless, this was significantly higher than last month's -0.6% decline.

This highlights how difficult the fight against inflation is, as it can suddenly reaccelerate after appearing to slow down in previous months. As a result, expectations for rate cuts in 2023 are fading away.