Succinct Summations week ending December 20, 2013.

Positives:

1. The Taper begins, with thunderous applause from investors as the S&P 500 and Dow Jones both make new all-time closing highs.
2. Q3 GDP was revised (pending revision) to 4.1%, increased consumer spending moved the needle.
3. Home-builder confidence jumped to its highest reading in 4 months and matched an 8-year high hit in August.
4. Housing starts rose ~23% m/o/m and are at their highest level since 2008!
5. Industrial production climbed 1.1% m/o/m
7. CPI in November was flat m/o/m but up .2% ex food and energy vs expectations of up .1% for both
8. US Industrial Production surprised to the upside with a 1.1% m/o/m gain;
9. EU services and manufacturing composite index rose .4 pts to 52.1, a 3 month high
10. UK unemployment rate falls to 7.4%, the lowest since April ’09

 

Negatives:

1. Pricing, higher interest rates this week across most of the yield curve will raise the cost of capital on top of an economy
2. Gold hit a new 52-week low and is down A LOT YTD. (I suspect a lot of retail investors are still clinging to these losses).
3. Initial jobless claims rose 10k to 379k, v expectations of 336k.
4. Building permits dropped 3.1% m/o/m but remain very strong.
5. Existing home sales fell to the lowest level of the year, totaling 4.90mm — 100k less than expected; refi applications fell 4.3% to just shy of the lowest level since June ’09.

 

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

10 Responses to “Succinct Summations of Week’s Events (12/20/2013)”

  1. Anonymous37 says:

    3. Initial jobless claims rose 10k to 379k, v expectations of 336k.

    New Deal Democrat over at bonddad.blogspot.com has an analysis of the initial jobless claims numbers. His take is that the seasonal correction at this time of year is particularly tricky, and that the weather here in the States may have affected retail sales and associated hiring. http://bonddad.blogspot.com/2013/12/yesterdays-poor-initial-jobless-claims.html

  2. Anonymous37 says:

    Also, I am assuming that you, like most people, will be taking things relatively easy during the next 2 weeks. So a preemptive Happy Holidays to you, Barry.

  3. trafficengineer says:

    The Seattle tunnel project hit a rock (or something) today. This article from 2010 predicted something like this could happen and Seattle taxpayers will be in trouble if something like this happens.
    http://goo.gl/m6ZFJq

  4. Willy2 says:

    “1. The Taper begins, with thunderous applause from investors as the S&P 500 and Dow Jones both make new all-time closing highs.”

    I see it differently. Tapering = Selling of T-bonds = Higher interest rates = Pushing the USD higher = A higher USD/Yen = Higher Dow Jones.

  5. Willy2 says:

    “4. Housing starts rose ~23% m/o/m and are at their highest level since 2008!”

    Agree. But the current (high(er)) level is about at the same level of the “Housing starts” bottoms of 1974/1975, 1981/1982 & 1991.

    • We’ve shown that chart many time before

      • Willy2 says:

        - I use the charts from Calculated Risk. (couldn’t find the latest one).
        - Demographics, remember ? See Harry S. Dent. (his market timing sucks, but his “demographics” story stands solid as a rock).

      • Willy2 says:

        - I regularly look at the “home starts” charts from Calculated Risk.
        - For years I under-estimated the importance of housing starts. Because building homes & factories are a MAJOR source of economic activity in EVERY country (US, Canada, Europe, Australia, ……… ). And home building also depends on “Demographics”. See Harry S. Dent. (Dent IMO also under-estimates the importance of home construction.)
        - Even John Williams (shadow stats) implicitely acknowlegdes the importance of home construction. His data shows that the US economy (i.e. GDP) started to weaken in 2006 along side with the collapse of home prices.

  6. chartist says:

    Ford got clobbered – that’s my summation. It’s gonna take a year for this to bottom out. That requires more patience than I have…..Funds will be rolled out of F into DD as this has a nice reverse head and shoulder’s pattern on the monthly chart indicating $98 as a possible target.