Construction Output in Eurozone Slumped 2.5 Percent on a Monthly Basis

The major U.S. indexes slashed solid midweek gains last week, finishing it mixed as inflation and Fed concerns weighed on stocks. The Nasdaq held key support, while the S&P 500 just undercut some levels.

After a strong start to the week, several leading stocks suffered violent sell-offs, but then came back. The stock market rally still appears to be in the midst of a normal self-correction. But investors should be less aggressive in the short run, perhaps slightly trimming exposure by cutting losers and taking some partial profits.

Nvidia (NVDA), luxury homebuilder Toll Brothers (TOL) and Latin American e-commerce giant MercadoLibre (MELI) are among the many notable earnings reports in a holiday-shortened week. All three are near potential buy points. Nvidia earnings will be important for Advanced Micro Devices (AMD) and the chip sector generally. Toll Bros. earnings will be key for other homebuilders.

Home Depot (HD) and Walmart (WMT) will report early Tuesday, with the big-box retail giants not far from buy points.

Commoditywise, crude oil prices are recovering this European afternoon as investors' optimism concerning China's reopening apparently boosted demand expectations. Last week, the International Energy Agency (IEA) revealed that the crude demand is expected to rise by 2 million barrels per day in 2023, with China anticipated to account for almost half of the estimated increase. Over on the supply side, fears have been mounting as Russia previously said it will be cutting its oil production by 500,000 barrels per day in March.

Major stock indexes in Europe are trading with modest gains today as investors digested comments by world leaders at the Munich Security Conference which concluded over the weekend and awaited a string of economic data, including preliminary PMI figures from the Eurozone, due for release this week. Meanwhile, Eurostat's preliminary report revealed that the seasonally adjusted construction output in the euro area slid 2.5% in December 2022 on a monthly basis. YoY, the indicator was down 1.3%. Across the entire EU, the figure fell 2% compared to November 2022 and 0.4% on an annual basis. In the Eurozone, building construction saw a monthly decline of 2.3% and civil engineering tumbled 4%. YoY, building construction and civil engineering registered a fall of 1.3% and 1.5% respectively.

At the time of writing, the Euro Stoxx 600 rose 0.17%. The German DAX climbed 0.1% concurrently with Allianz (ALTV), up 1.04%, as the best performer. The British FTSE 100 increased 0.16% with Frasers Group (FRAS.L) rallying 2.92%. The French CAC 40 was down 0.1%, however, as Veolia (VIE.PA) jumped 1.02%.