Federal Reserve Chairman Jerome Powell is delivering his second day of testimony to Congress, this time to the House Banking Committee, now controlled by Democrats — and more in Wednesday’s Markets In Brief.
Powell is facing questions from committee members about whether moves to loosen banking regulations could put the financial system at risk. President Donald Trump has made government deregulation a key part of his economic program and has nominated officials to the Fed to push that agenda.
Powell’s prepared testimony to the committee is identical to the testimony he delivered Tuesday before the Senate Banking Committee. In it, he says that the Fed intends to take a “patient approach” in determining future hikes to its benchmark interest rate and will be closely watching risks to the economy such as a slowdown in global growth.
MARKETS IN BRIEF
US Pending Home Sales Rebounded 4.6 Percent in January
More Americans signed contracts to buy homes in January as lower mortgage rates appeared to give the real estate market a boost.
The National Association of Realtors said Wednesday its pending home sales index rose 4.6 percent last month to 103.2. The rebound has come as average 30-year mortgage rates have fallen since peaking at nearly 5 percent in early November. Still, higher mortgage rates in 2018 depressed pending sales by 2.3 percent over the past 12 months.
The increase suggests that home sales may rebound this year after months of flagging purchases. Key to any increase in sales is 30-year mortgage rates, which slipped last week to an average of 4.35 percent, according to mortgage buyer Freddie Mac. Lower borrowing costs improves affordability for homes, which until recently have generally seen their prices climb faster than wages.
There are emerging signs that home sales might recover after a slump in home construction in December. Pending sales improved in the pricey markets of Seattle, Boston and San Jose, California, according to a report by the brokerage Redfin.
Redfin data show that pending sales jumped 15 percent in the Seattle area during January, 4 percent in Boston and 8 percent in San Jose.
The Realtors’ pending sales index improved in the Northeast, Midwest, South and West in January. Signed contracts jumped 8.9 percent in the South, where homes are generally more affordable. But in the pricier West, the increase was just 0.3 percent.
Pending sales are a barometer of home purchases that are completed a month or two later.
Lowe’s Swings to 4Q Loss on Charges, Anemic Housing Market
Lowe’s swung to a loss in its fourth quarter, weighed down sizeable one-time charges and a lethargic housing market.
The home improvement company lost $824 million, or $1.03 per share. That includes $1.6 billion in charges, most from a $952 million goodwill impairment charge. Stripping out the charges, earnings were 80 cents per share, a penny better than analysts polled by FactSet had expected.
A year ago the Mooresville, North Carolina, company earned $554 million, or 67 cents per share.
Revenue rose to $15.65 billion from $15.5 billion, short of Wall Street expectations.
Sales at stores open at least a year increased 1.7 percent, and 2.4 percent in the U.S.
Lowe’s Cos. on Wednesday projected earnings between $6 and $6.10 for this year. Analysts had been expecting $6.04 per share.
A Very Merry Christmas at Best Buy With Sales Booming
Best Buy is reporting big holiday sales numbers, more evidence that Americans are willing and able to spend.
A dire report from the U.S. Commerce Department this month on retail sales cast a pall over the sector, raising concerns that an extended period of elevated consumer confidence had ended abruptly. Other notable retailers, like Walmart, also had big holiday quarters.
Shares in Best Buy jumped more than 11 percent before the opening bell Wednesday.
The nation’s biggest consumer electronics retailer said comparable-stores sales, a key indicator of a company’s health, rose 3 percent in the fourth-quarter and 9 percent on the year. Best Buy raised its quarterly dividend by 11 percent, to 50 cents per share.
Volvo’s Polestar Unveils Electric Car Touted as Tesla Rival
Volvo’s electric performance brand Polestar is unveiling a battery-powered compact car touted as a rival to Tesla’s Model 3.
The Polestar 2 is a five-door vehicle with a panoramic glass roof, an all-vegan interior and a battery with enough capacity to drive 500 kilometers under European tests for range measurement, or 275 miles under U.S. testing rules.
With 408 horsepower, it should accelerate from zero to 100 kph (0-62 mph) in under five seconds. Polestar said Wednesday that the car’s U.S. price for the launch version will be $55,500 after tax incentives; later a lower-priced version with less range is envisioned.
The car, to be shown at next month’s Geneva auto show, becomes available in 2020.
Volvo Car Group, headquartered in Goteborg, Sweden, is a subsidiary of Chinese automaker Geely.
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