Strong US Real Estate Data was one of several pieces supporting market advances last week. So much so, that hawkish Federal Reserve committee comments didn’t dampen demand.

US Data
Domestic data supported market sentiment as the 2nd estimate of first quarter GDP improved from 0.5% to 0.8% annualized[1]. While GDP was weak and left much to be desired, the rate is still well above the previous two, first quarters.

Durable goods orders increased 3.4% in April, when they were only expected to increase 0.5%[2]. Strong durable goods, spell positive things for corporate spending, and subsequently reflect strong corporate sentiment.

Crude oil inventories fell by 4.226 million barrels, far more than the expected 2.45 million barrels[3]. Oil price support helped to strengthen market sentiment through-out the week. Oil prices even reached $50 a barrel, a level last reached in November.

Housing Data
Domestic housing data impressed, as the housing market is picking up steam. New home sales increased to 619K from 531K in April, beating expectations of 523K. Pending home sales were expected to increase a meager 0.6% in April and they improved dramatically by 5.1%[4]. The strengthening data points to better employment and improved confidence. It’s likely to continue this path as persistent low interest rates  on the long end of the curve lead into the summer season.

International Data
Earnings for the Euro 600 improved for the 1st quarter. Yields also fell last week as the 10 year German Bund reached .13%.

Japan was planning on increasing sales taxes in April by 3%. This was going to be in an effort to give inflation statistics a healthy jump start. The problem is that it puts a dent in demand causing more risk of a recession. It’s being reported that Japan is likely to put a 3-year delay on the tax hike.

Brazil successfully passed a revised budget forcing the hand for financial reforms. This marks the first successful move of President Michel Temer’s short tenure.

Conclusion
Strong housing, improved GDP, strong durable goods, and firming oil prices were all too much for the negative news from the Federal Reserve. Many Fed Governors came out this last week supporting previous minutes indicating the potential for a rate hike in the near future. There is doubt around a June rate hike. England intends on voting on whether or not to leave the EU with in days of the Fed meeting. This makes July a likely target for a rate hike.

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[1] www.investing.com – economic calendar
[2] www.investing.com – economic calendar
[3] www.investing.com – economic calendar
[4] www.investing.com – economic calendar