Shares of Goldman Sachs are under a ton of selling pressure today after the company reported weaker than expected earnings.  With a decline of nearly 5% on the day, the stock is on pace for its second worst earnings reaction day since at least 2001.  What makes today’s decline even more noteworthy is the fact that the stock has now given up half of its gains since Election Day.  As shown in the chart below, from Election Day through its intraday high on 3/1, shares of Goldman rallied 74 points.  Since then, the stock has now declined roughly 37 points through this morning’s low.

Following today’s decline, shares of Goldman are also sitting at a critical support level which coincides with the level they opened up at on 11/30 when Treasury Secretary Steve Mnuchin was officially nominated and made comments that Dodd-Frank is ‘too complicated’ and that he also planned to take a closer look at the Volcker Rule.  A lot of the rally in the Financial sector was predicated on less in the way of regulatory burdens and to a lesser degree tax reform.  With Goldman now giving up half of its post-election gains, the case can be made that much of the optimism over less regulation has been erased.

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Housing data this morning came in mixed as Housing Starts missed expectations while Building Permits exceeded forecasts.  As shown in the table to the right, starts came in 35K below consensus forecasts while permits exceeded forecasts by 10K.  The table below breaks down today’s report in terms of both regions and size of units.

As far as unit sizes are concerned, both single and multi-family units were just about equally weak in March with both declining between six and eight percent.  Building Permits saw more disparate results as single-family permits declined modestly while multi-family units surged over 13%.  On a regional basis, the only area of the US where starts increased was in the Northeast.  Meanwhile, permits saw a m/m increase in every region except the Midwest.

So how does the current level of starts compare to history?  The chart below shows the historical monthly Housing Starts report going back to 1959.  At this month’s level of 1.215 mln on a seasonally adjusted rate, Housing Starts are still more than 200K below their historical average going back to 1959, and haven’t seen even an average monthly reading once during the current expansion.  The closest we came to average was last October when the SAAR monthly reading hit 1.32 million.  What’s even more startling about this lack of a single ‘average’ monthly reading is that it doesn’t even account for the increase in population during this period.  Decades ago, Housing Starts were routinely in the 1.5 million range even when the US population was not much more than half of the size that it is now.  Start a 14-day free trial to unlock all of Bespoke’s financial markets research.

Bespoke co-founder Paul Hickey appeared on CNBC’s Closing Bell on Monday to discuss the markets and earnings reports from Netflix (NFLX) and United Continental (UAL) as well as a number of other topics.  To view the segment, please click on the image below.
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The S&P 500-tracking SPY ETF is down 2.49% since its March 1st high.  Below is an updated look at our country ETF trading range screen to highlight how the rest of the world has been trading over this time period.  In terms of overbought/oversold levels, 13 of 30 countries remain overbought, while none are oversold.  But the US is one of just a few countries trading below their 50-day moving averages (the black vertical “N” line in the screen).  Just 5 of 30 countries are down since March 1st, with Brazil (EWZ) down the most followed by the US (-2.49%).

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