Economic Data Brightens, But Technical Hurdles Remain

Housing starts, core capital goods, and durable goods orders beat expectations, signaling an appetite for risk despite market volatility.

Published on Feb. 24, 2026

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Recent economic data, including housing starts, core capital goods orders, and durable goods orders, have exceeded expectations, suggesting a potential upturn in the economy. However, the market faced technical obstacles, with the S&P 500 failing to breach its 21-day exponential moving average and 50-day simple moving average on Wednesday. The article discusses the implications of this data and the market's reaction, as well as the role of risk managers and algorithms in driving market behavior.

Why it matters

The stronger-than-expected economic data could signal a shift in investor sentiment and a growing appetite for risk, which could have broader implications for the markets and the overall economic outlook. However, the technical hurdles faced by the S&P 500 suggest that the market remains cautious and that the recovery may face challenges.

The details

The data showed that housing starts, core capital goods orders, and durable goods orders all beat expectations in December, with core capital goods orders and durable goods orders excluding transportation seeing particularly strong growth. This suggests that business investment and consumer demand remain resilient, despite concerns about a potential economic slowdown. However, the S&P 500 failed to breach its 21-day exponential moving average and 50-day simple moving average on Wednesday, which could signal a lack of momentum and caution among investors. The article also discusses the role of risk managers and algorithms in driving market behavior, noting that their influence has increased the importance of technical analysis in the markets.

  • Housing starts for December grew from November and were the strongest since July.
  • December durable goods orders printed at -1.4% from November, better than expected.
  • Core capital goods orders, a proxy for business investment, grew 0.6% in December, exceeding expectations.

The players

Neel Kashkari

The president of the Minneapolis Federal Reserve, who is scheduled to speak today.

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What’s next

Traders and investors will be closely watching Walmart's earnings report, as well as weekly jobless claims data, to gauge the strength of the economy. Additionally, the market's ability to breach the S&P 500's 50-day simple moving average will be a key technical indicator to watch.

The takeaway

The recent economic data suggests a potential upturn in the economy, but the market's technical obstacles and the influence of risk managers and algorithms highlight the ongoing challenges and caution that investors face. The ability to navigate these dynamics will be crucial for the markets going forward.