Stocks spent the majority of Monday bouncing between positive and negative territory before eventually ending lower as investors took profits following last week's outsized gains.
At the close, the tech-heavy Nasdaq Composite was down 1.1% at 11,196, the broader S&P 500 Index was off 0.9% at 3,957, and the blue-chip Dow Jones Industrial Average had slipped 0.6% to 33,536.
The choppy price action came amid mixed messages from Federal Reserve officials. On one hand, Fed Governor Christopher Waller said over the weekend that "we've still got a ways to go" before the central bank can stop raising interest rates.
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On the other hand, today's comments from Fed Vice Chair Lael Brainard were much more dovish. "I think it will probably be appropriate soon to move to a slower pace of rate increases," Brainard said earlier in an interview with Bloomberg News. This comes after the Fed earlier this month issued its fourth straight 75 basis point rate hike, as well as last week's inflation update that showed consumer price growth eased in October.
"Inflation data will remain center stage this week with the producer price index read [due out tomorrow morning], along with retail sales and earnings, and some more clarity on the midterm election results," says Chris Larkin, managing director of trading at E*Trade. While the House is still up for grabs, it seems we could be headed to a divided government, which may be welcomed news for the market. A divided government may be more market-friendly than one controlled entirely by the Democratic party, since the latter was more likely to result in government spending programs with the potential to feed inflation and keep the Fed on a hawkish path."
Housing Stocks to Watch in a Tough Market
Also in focus this week will be some updates on the housing market, with housing starts and building permits for October set for release Thursday morning. Both are expected to decline as soaring mortgage rates cool demand.
While there's certainly pain ahead for many in the housing industry, including homebuilders, investors still have some options. Single-family rental homes, for instance, are poised to benefit from strong industry fundamentals, says Credit Suisse analyst Sam Choe. "The overall affordability picture indicates renting continues to be the more attractive option vs. owning a home, contributing to strong demand for rentals and good leasing momentum late into peak leasing season," Choe adds.
Here, we explore five top-rated housing stocks set for long-term growth. The names featured here all have exposure to single-family rental homes and could continue to benefit from market strength. Check them out.
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