Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

FEBRUARY SKIES ARE PARTLY CLOUDY: NAHB, EMPIRE STATE

Investors returned from their three-day holiday weekend to be greeted two current-month economic indicators; one gloomy and the other providing an unexpected patch of blue.

Starting with the more dismal of the two, the mood among homebuilders has unexpectedly soured further this month, according to the National Association of Home Builders (NAHB).

NAHB's Housing Market index USNAHB=ECI slid 5 points to land at 42, the lowest print since September.

Economists polled by Reuters expected the index to stand pat at the prior month's reading of 47.

The new construction segment of the housing market has been caught in the crosswinds of elevated mortgage rates and strained inventories of existing homes on the market. Now, regulatory and policy unknowns have been tossed into the mix.

"Policy uncertainty and cost factors created a reset for 2025 expectations in the most recent HMI," writes NAHB Chairman Carl Harris. "Uncertainty on the tariff front helped push builders' expectations for future sales volume down to the lowest level since December 2023."

On Wednesday, the Commerce Department is due to release its January data on housing starts and building permits, which are forecast to fall by 7.3% and 1.5%, respectively.

Crossing to the sunny side of the street, factories in New York state surprised analysts by expanding their activity this month.

The New York Federal reserve's Empire State manufacturing index USEMPM=ECI surged 18.3 points to 5.7 from -12.6, leap-frogging the -1.0 consensus.

An Empire State number in positive territory signifies monthly expansion.

"The general improvement in the Empire survey in recent months has mirrored the upturn in the headline ISM manufacturing index," says Oliver Allen, senior U.S. economist at Pantheon Macroeconomics.

But Allen adds this note of caution: "the tariff-linked surge in demand for durable goods since late last year (might be) starting to put some upward pressure on prices."

(Stephen Culp)

*****

FOR TUESDAY'S EARLIER LIVE MARKETS POSTS:

WALL STREET LITTLE CHANGED AS INVESTORS WAIT FOR MORE TARIFF NEWS - CLICK HERE

S&P 500 INDEX CHOP ABOUT TO STOP? - CLICK HERE

POSITIVE EARNINGS REVISIONS, EPS UPGRADES FUEL STOXX STRENGTH - CLICK HERE

COULD PEACE IN UKRAINE LOWER THE HEAT ON THE EURO FROM TARIFFS? - CLICK HERE

IS NOW FINALLY THE TIME FOR TELECOMS? - CLICK HERE

NEW RECORD HIGHS, WITH A BIT OF RED - CLICK HERE

BEFORE THE BELL: EUROPE NEAR PEAKS, DEFENCE IN DEMAND - CLICK HERE

ARMS STOCKS SOAR AHEAD OF UKRAINE PEACE TALKS - CLICK HERE