Allow me to make a bold claim. In my opinion, this is the most important week in April for stocks and the economy, as two unusually significant economic reports are scheduled for release on Tuesday and Wednesday, either of which could exert a big impact on the S&P 500 (SNPINDEX:^GSPC).
The first, which I discussed at length yesterday, is the National Association of Realtors' report on March existing-home sales. The gravity of this can't be overstated, as the housing market is a principal component of the American economy.
Although the pace of existing-home sales has increased consistently since the middle of 2010, everything seemed to change last year. After peaking at a seasonally adjusted annual rate of 5.38 million in July of last year, they've since taken a nosedive. Most recently, the figure dropped to 4.6 million in February.
With the spring selling season just around the corner, the question is whether the downturn is a temporary blip, caused perhaps by extreme weather from earlier in the year, or whether it's a genuine correction. If it's the former, there's little reason for concern. If it's the latter, there may very well be.
Along these same lines, the second report will shed light on the homebuilding industry. On Wednesday, the government is scheduled to release its estimate of new home sales for March.
The figure for February, while not as dire as the market for previously owned homes, similarly suggested that the momentum in the housing market may have taken a turn for the worse, as new home sales were down by 3.3% compared to January. Again, the thing to watch is whether the downturn is temporary or here to stay, at least for the time being.
In sum, if you're an investor or are otherwise interested in the economy, then I'd strongly encourage you to keep a close eye on both of these events.