Existing home sales in the US sank by 4.9% to a seasonally adjusted annualized rate of 4.08 million in January of 2025, the sharpest decline in seven months, and missing market expectations of 4.12 million. "Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve. When combined with elevated home prices, housing affordability remains a major challenge." The median price for existing home sales inched 1.9% lower from the previous month to $396,000, a 19th consecutive annual increase. In the meantime, inventory of unsold housing grew to 3.9 months of supply at the current sales pace from 3.7 months of supply in December. From the previous year, existing home sales were 2% higher

Stocks in the US moved lower on Friday after flash PMIs raised concerns about the economic outlook. The S&P 500 fell 0.3% and the Nasdaq lost 0.1% while the Dow Jones extended losses to 360 points, as S&P Global PMIs showed the services sector unexpectedly moved into contraction territory this month while manufacturing growth accelerated. At the same time, input prices accelerated and business expectations slumped amid increasing concerns and uncertainty related to federal government policies. Industrials, energy and health were the worst performing sectors. Shares of UnitedHealth plunged almost 9% after The Wall Street Journal reported that the Justice Department has launched an investigation into the company’s Medicare billing practices in recent months, citing sources familiar with the matter. For the week, the S&P 500 remains little changed, while the Nasdaq has lost 0.3%, and the Dow is down 0.8% so far.

Retail sales in Canada are expected to ease by 0.4% from the previous month in January of 2025, the first drop in seven months, according to preliminary estimates. That follows a 2.5% surge in the final month of 2024, revised higher from the preliminary estimate of 1.6%, to mark the sharpest rise in retail turnover since May of 2022. Sales were up in all nine subsectors, led by surges in food and beverage retailers (3.5%) and sales in gasoline stations and fuel vendors (4.2%). Core sectors for consumers were also higher, with turnover increasing sharply in general merchandise retailers (3.2%) and clothing, accessories, shoes, and apparel retailers (3.1%). While remaining high, sales growth missed the average increase in motor vehicle and parts dealers (1.9%) and building material and garden equipment dealers (2.4%). From the previous year, retail turnover was 3.6%, the sharpest increase in nearly two years.

Germany’s 10-year bond yield fell below 2.5% after recent data reinforced the view that the European Central Bank needs to cut rates more aggressively to help the economy. Eurozone business activity remained stagnant in February, with Germany seeing a slight acceleration in expansion, and France experiencing its sharpest contraction in over a year. As a result, markets now pricing in 78 bps of easing this year, up from 74 bps on Thursday. Meanwhile, investors will be closely watching Germany’s general election on Sunday. Polls suggest the conservative CDU/CSU bloc is poised to win but will likely need coalition partners to govern. Traders also weighed geopolitical risks, particularly as the US signaled plans to scale back support for Ukraine while engaging in negotiations with Russia excluding both Ukraine and Europe. Additionally, President Trump signaled plans for a 25% tariff on auto, semiconductor, and pharmaceutical imports from April 2, potentially hitting European carmakers.

The S&P Global UK Manufacturing PMI fell to 46.4 in February 2025 from 48.3 in January, missing market expectations of 48.4, a preliminary estimate showed. It marked the sector’s sharpest contraction since December 2023, as output declined for the fourth consecutive month at an accelerating pace, with sales weakening in both domestic and overseas markets. Additionally, employment levels and unfinished business saw significant declines. On the pricing front, input cost inflation picked up due to rising raw material and energy costs, while factory gate prices posted their steepest increase since April 2023.

The HCOB Eurozone Composite PMI at 50.2 in February of 2025, remaining unchanged from the previous month for a second consecutive period of muted growth in the Eurozone’s private sector activity, although slightly missing market expectations of 50.5. Growth was carried by the services sector, despite its slowdown (50.7 vs 51.3 in January), while manufacturing activity contracted at the slowest pace in nine months (47.3 vs 46.6). New orders at the aggregate level contracted for the ninth month in a month, underscoring the weak demand levels in the bloc. Still, output was slightly higher as firms depleted backlog levels at the sharpest pace in three months. The poor backdrop for new contracts drive firms to shed capacity through employment, with manufacturing head counts falling the most since July 2012 when excluding the Covid shock. On the price front, input costs rose at the fastest pace in ten months, lifting output charges. Looking forward, optimism dipped to a three-month low.