- Durables Ex Transportation for November fell .6% versus estimates of a 1.0% gain and a .2% decline in October.
- Final Univ. of Mich. Consumer Confidence for December rose to 91.5 versus estimates of 89.0 and a prior estimate of 88.7.
- New Home Sales for November fell to 1245K versus estimates of 1300K and 1404K in October.
BOTTOM LINE: US orders for durable goods jumped 4.4% in November, the most in six months, propelled by a surge in demand for aircraft, Bloomberg reported. Orders for transportation equipment soared 15.6% versus an 11.2% gain the prior month. Orders for defense hardware plunged 27% in November. Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, dropped 2% last month. The decline in durables ex transportation is surprising given record low inventory levels. I would expect to see an increase in this number next month.
US consumer confidence rose in December to the highest since July as lower gas prices and a rising stock market gave Americans more money to spend for the holidays, Bloomberg reported. The expectations component of the index soared to 80.2 from 69.6 the prior month. The current conditions component of the index, which is a gauge of Americans’ perception of their financial situation and if it’s a good time to purchase large items such as cars, jumped to 109.1 from 100.2 in November. Consumer confidence has now surged 17.3 percentage points in two months, the biggest two-month gain since the final two months of 1992. I expect consumer confidence to reach cycle highs over the intermediate-term as rising stock prices, low interest rates, an end to the Fed tightening cycle, falling energy prices, a stable job market and lower inflation readings more than offset a slowing housing market, thus leading to a lifting of the irrational pessimism that has developed since the bursting of the stock market bubble and 9/11 terrorist attacks.
US new home sales in November fell as rising mortgage rates and elevated prices discouraged some buyers, Bloomberg reported. Sales fell 11.3% from an all-time high in October, while the median price of a new home rose slightly to $225,200. The supply of new homes at the current sales rate increased to 4.9 months, the most in 9 years. Sales fell 22.1% in the West, 18.3% in the Midwest and 5.5% in the South. Sales rose 13.4% in the Northeast. I continue to expect the housing market to slow to more healthy, sustainable levels from all-time record highs. This will likely lead to a slowing in the overall US economy to average rates from high rates, which will benefit US stocks.
No comments:
Post a Comment