January 3rd – Weekly Update

  • Stocks dipped during the last trading session for 2016. The S&P 500, Nasdaq and Dow Jones all experienced a loss for the quiet period. Oil and gold were slightly up. The 10-year U.S. Treasury note yield ended the week at approximately 2.45%.
  • The S&P Case-Shiller 20-city composite home price index rose 0.6% month-to-month in October, this beats the 0.4% gain expected and compares to a 0.4% rise in September. The index was up 5.1% year-to-year, an increase from September’s 5.0% year-to-year gain. However, the release was cautious, noting that interest rates rose in November, and that home prices continue to outpace gains in wages and personal income, which it said cannot continue indefinitely.
  • Pending home sales for November fell 2.5% month-to-month compared to a consensus that was looking for a 0.4% gain. The index is now down 0.4% year-to-year and at its lowest level since January. The release noted the sharp rise in mortgage rates, along with low inventory, discouraged would-be buyers.
  • The Consumer Confidence index climbed to 113.7 in December, ahead of the 108.2 consensus estimate and up from 109.4 in November. It was the strongest reading since 2001 and came after a steep November rise. The release noted that the improvement is solely due to a rise in expectations, which hit a 13-year high. It also observed the post-election surge in optimism was most pronounced among older consumers. Consumers’ assessment of current conditions declined.
  • According to Lloyds Bank’s business barometer, business confidence in the U.K. rose to 39% in the month of December, despite ongoing geo-political uncertainty around the Brexit vote and Donald Trump victory. Economic optimism increased to 30%.
  • China’s National Bureau of Statistics (NBS) announced that companies with an annual revenue above 20 million yuan (approximately $2.87 million) experienced a profit gain of 14.5% year-to-year in November, up from 9.8% year-to-year in October.
  • China’s manufacturing Purchasing Manager’s index (PMI) that tracks approximately 3,000 companies grew for the fourth consecutive month rising to 51.7 in November compared to 51.2 in October. NBS noted that the reading is above the neutral 50-point level, signaling expansion.

CPWM Weekly Market Monitor (2017.01.03)