US equities were lower last week, as heavy selling Thursday and Friday sessions reversed earlier strength that saw the S&P 500 hit fresh record closes on Tuesday and Wednesday. The equal-weight S&P 500 (RSP) outperformed the cap-weighted index by around 100 bp this week after two straight weeks of underperformance. The tech-heavy Nasdaq was also an underperformer with some sizable drags from Magnificent 7 names. Other underperformers included cruise lines, airlines, trucking, managed care, homebuilders, home improvement and housing-linked retail, internets, investment banks, moneycenter banks, copper and aluminum. Outperformers included China tech, GSEs, pharma, toys, dollar stores, food and beverage, cosmetics, energy, and telecom. Treasuries were a bit firmer across the curve. The dollar index was little changed, though yen strength was the biggest story in FX. Gold was up 2.1% for the week, also setting a fresh record this week. Bitcoin futures were down 2.8%. WTI crude was down 0.2%.
This week saw more concerns around Washington and Trump 2.0 uncertainty. There was little progress around the budget as Trump endorsed the House budget while the Senate continues to work on its own separate bill. Some GOP lawmakers have warned negotiations are not going well ahead of the March 14th shutdown cliff. It was also another volatile week of tariff headlines. Trump said he would likely impose 25% tariffs on autos, semis, and pharmaceutical imports as of early April, while the administration continued to float tariff revenues replacing taxes, which some view as a growing risk of a harsher tariff regime, rather than tariffs just being used as a negotiating tool. However, Trump also said this week a new China trade deal is possible, while the EU said it is ready to discuss cutting tariffs to avoid a trade war with Washington, both of which may hint at an ultimately softer stance for the Trump administration on trade.
Other pieces of the bearish narrative included some cautious Walmart earnings takeaways, geopolitical risks, broader growth worries following this week’s data (PMIs, housing market), and inflation concerns. Some also flagged extended sentiment/positioning following this week’s selloff in momentum and retail favorites/meme stocks following a big recent ramp in speculative retail flows. Pieces of the bullish narrative included some Treasury support following the Fed’s signaling that it would slow or pause QT mid-year, and Treasury Secretary Bessent’s comment that the US is a ways off from boosting longer-term debt sales.. The Citi Economic Surprise Index also turned negative this week, which some said could ultimately add support for more dovish Fed policy path moving forward. Goldman Sachs economists this week flagged some weaker retail sales datapoints (Walmart, restaurant commentary), but said it could be due to weather, and noted a healthy macro backdrop for consumers.
Data this week included February flash Manufacturing PMI ahead of consensus, though flash Services missed and fell into contraction for the first time in just over two years, with the report flagging uncertainty over federal government policies. Final Michigan Consumer Sentiment also fell, with 1Y inflation expectations unchanged from the preliminary print at 4.3%, the highest since Nov-23, while 5Y inflation expectations ticked up 0.2pp from the preliminary print to 3.5%, the highest since 1995. Initial claims for the week to 15-Feb were a bit higher than expectations, though some analysts focused on rising DC-area claims following recent federal government layoffs. The February Philly Fed Index fell over 26 points m/m to 18.1, missing 20.0 consensus, with prices paid and prices received highest since Q4-22. February Empire State Manufacturing Index posted a surprise positive print, though the prices indexes also rose. A busy week of housing data included February NAHB builder confidence, which missed and fell to a five-month low of 42. January existing home sales also missed, which some said reflects concerns around rates, prices, and softening demand.
Fed -It was a fairly quiet week around the Fed. This week’s January FOMC meeting minutes were mostly in line with expectations, though did note that many officials expect the balance sheet runoff to end in mid-2025. There was a lot of Fedspeak this week, though officials mostly continued to stress the narrative around patience and data dependence, while some continued to note uncertainty around the inflationary impact of Trump policy proposals. March rate cut odds continue to hold around 2%, unchanged w/w. The first cut is priced in for July, while the market is pricing around 40 bp of cuts for 2025, little changed w/w.
Total Fed Holdings Continue to come down. Current level is 6.782 trillion. That’s down 2.183 trillion form the high in April 2022.
The Baker Hughes rig count gained 4 last week. There are 586 oil and gas rigs operating in the US – Down 37 from last year.
Metals Complex
Employment Picture
Weekly Unemployment Claims – Released Thursday 2/20/2025 –In the week ending February 15, the advance figure for seasonally adjusted initial claims was 219,000, an increase of 5,000 from the previous week’s revised level. The 4-week moving average was 215,250 a decrease of 1,000 from the previous week’s revised average.
December Jobs Report –BLS Summary –Released 2/7/2025 – The US Economyadded 143k nonfarm jobs in January and the Unemployment rate declined to 4.0%. Average hourly earnings increased 17 cents to $35.87. Hiring highlights include +44k Healthcare, +34k Retail Trade, +32k Government, and +22k in Social Assistance.
Average hourly earnings increased 17 cents/0.5% to $35.87.
U3 unemployment rate declined 0.1% to 4.0%. U6 unemployment rate was unchanged at 7.5%.
The labor force participation rate was unchanged at 62.6%.
Average work week declined 0.1 hours to 34.1 hours.
Job Openings & Labor Turnover Survey – JOLTS – Released 2/4/2025 – The number of job openings decreased to 7.6 million on the last business day of December, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed at 5.5 million and 5.3 million, respectively. Within separations, quits (3.2 million) decreased and discharges (1.8 million) changed little.
Employment Cost Index – Released 1/31/2025 – Compensation costs for civilian workers increased 0.9% for the 3-month period ending in December 2024. Wages and salaries increased 0.9% and benefit costs increased 0.8% from September 2024. The 12-month period ending in December 2024 saw compensation costs increase by 3.8%. The 12-month period ending December 2023 increased 4.2%. Wages and salaries increased 3.8 percent over the 12-month period ending in December 2024 and increased 4.3 percent for the 12-month period ending in December 2023. Benefit costs increased 3.6 percent over the 12-month period and increased 3.8 percent for the 12-month period ending in December 2023. This report is published quarterly.
This Week’s Economic Data – Blue links take you to data source
Housing Starts – Released 2/19/2025 – January housing starts came in at 1,366,000, 9.8% below the December estimate and is 0.7% below the January 2024 rate. Building permits were 0.1% above the December rate at $1,483,000 but is 1.7% below the January 2024 rate.
Recent Economic Data –Blue Links bring you to data source
Industrial Production and Capacity Utilization – Released 2/14/2025 – Industrial production increased 0.5% in January after rising 1.0% in December. Manufacturing decreased 0.1%. Utilities output increased 7.2%. Mining decreased 1.2%. Total industrial production in January was 2.0% above its year-earlier level. Capacity utilization increased to 77.8% in January, a rate that is 1.8% below its long-run average.
Retail Sales –Released 2/14/2025 – Headline retail sales were down 0.9% in January but are up 4.2% above January 2024.
Producer Price Index –Released 2/13/2025 – The Producer Price Index for final demand increased 0.4 percent in January, seasonally adjusted. Final demand increased 0.5 percent in December and 0.2 percent in November. On an unadjusted basis, the index for final demand moved up 3.5 percent for the 12 months ended in January.
Consumer Price Index –Released 2/12/2025 – The Consumer Price Index for All Urban Consumers increased 0.5% in January on a seasonally adjusted basis, after increasing 0.4% in December. Over the last 12 months, the all items index increased 3.0 percent before seasonal adjustment.
Consumer Credit –Released 2/7/2025 – Consumer credit increased at a seasonally adjusted annual rate of 2.4 percent in December. Revolving credit increased at an annual rate of 4.8 percent, while nonrevolving credit increased at an annual rate of 1.6 percent. During the fourth quarter, consumer credit increased at a seasonally adjusted annual rate of 4.2 percent, while in December it increased at a seasonally adjusted annual rate of 9.6 percent.
U.S. Trade Balance – Released 2/5/2025 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $98.4 billion in December, up $19.5 billion from $78.9 billion in November. December exports were $266.5 billion, $7.1 billion less than November exports. December imports were $364.9 billion, $12.4 billion more than November imports. The December increase in the goods and services deficit reflected an increase in the goods deficit of $18.9 billion to $123.0 billion and a decrease in the services surplus of $0.6 billion to $24.5 billion.
PMI Non-Manufacturing Index – Released 2/5/2025 – Economic activity in the services sector expanded in January for the seventh consecutive month. The Services PMI® registered 52.8 percent 1.2 percent lower than December’s reading of 54.0 percent.
PMI Manufacturing Index – Released 2/3/2025 – The January Manufacturing PMI registered 50.9 percent, 1.7 percent higher compared to December. The overall economy continued in expansion for the 57th month after one month of contraction in April 2020. The New Orders Index continued in expansion territory, registering 55.1 percent, 3.0 percentage points higher than the 52.1 percent recorded in December. The January reading of the Production Index (52.5 percent) is 2.6 percentage points higher than December’s figure of 49.9 percent.
U.S. Construction Spending –Released 2/3/2024 – Construction spending during December 2024 was estimated at a seasonally adjusted annual rate of $2,192.2 billion, up 0.9 percent from the November estimate of $2,180.3 billion. The December figure is 4.3 percent above the December 2023 estimate of $2,101.3 billion.
US Light Vehicle Sales – Released 1/31/2024 –U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 16.798 million units in December.
Chicago PMI – Released 1/31/2025 –Chicago PMI remained in contraction territory in January but rose to 39.5 from 36.9 points in December. The latest reading indicated that Chicago’s economic activity contracted for the 14th successive month in January. New orders rebounded by 13.8 points. Production increased by 4.0 points, matching the level seen in November. Inventories increased by 14.9 points, returning to expansionary levels for the first time since November 2023, following four consecutive months of decline. However, employment dropped 9.0 points, to the lowest level recorded since June 2020. Regarding price development, prices paid eased 2.7 points, the fourth successive fall and the lowest level since July 2024.
Personal Income – Released 1/31/2025 –Personal income increased $92.0 billion (0.4 percent at a monthly rate) in December. Disposable personal income (DPI)—personal income less personal current taxes—increased $79.7 billion (0.4 percent). Personal consumption expenditures (PCE) increased $133.6 billion (0.7 percent).
Advance Estimate of 4th Quarter 2024 GDP – Released 1/30/2025 –Real gross domestic product (GDP) increased at an annual rate of 2.3 percent in the fourth quarter of 2024, according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent. The increase in real GDP in the fourth quarter primarily reflected increases in consumer spending and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased.
Durable Goods – Released 1/28/2025 – New orders for manufactured durable goods in December, down four of the last five months, decreased $6.3 billion or 2.2% to $276.1 billion, the U.S. Census Bureau announced today. This followed a 2.0% November decrease. Excluding transportation, new orders increased 0.3%. Excluding defense, new orders decreased 2.4%. Transportation equipment, also down four of the last five months, led the decrease, $6.9 billion or 7.4% to $86.1 billion.
Consumer Confidence – Released 1/28/2025 – Consumer Confidence decreased from 109.5 to 104.1 in January. The Expectations Index which is based on consumers’ short-term outlook for income, business, and labor market conditions, fell 2.6 points to 83.9, just above the threshold of 80 that usually signals a recession ahead. Consumer confidence has been moving sideways in a relatively stable, narrow range since 2022. January was no exception. The Index weakened for a second straight month. All five components of the Index deteriorated but consumers’ assessments of the present situation experienced the largest decline. Notably, views of current labor market conditions fell for the first time since September, while assessments of business conditions weakened for the second month in a row. Meanwhile, consumers were also less optimistic about future business conditions and, to a lesser extent, income. The return of pessimism about future employment prospects seen in December was confirmed in January.
New Residential Sales –Released 1/27/2025 – Sales of new single‐family houses in December 2024 were at a seasonally adjusted annual rate of 698,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 3.6 percent above the revised November rate of 674,000 and is 6.7 percent above the December 2023 estimate of 654,000. The median sales price of new houses sold in December 2024 was $427,000. The average sales price was $513,600.
Existing Home Sales –Released 1/24/2025 – Existing home sales in December increased 2.2% from November and increased 9.3% year over year. Existing home sales increased to 4.24 million in December seasonally adjusted. The median price of existing homes for sale increased to $404,400, up 6.0% from one year ago.
This week we get data on Existing Home Sales, New Residential Sales, Consumer Confidence, Durable Goods, the 2nd Estimate of 4th Quarter GDP, Personal Income, and Chicago PMI.
This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any stock, bond, currency or CFD contract.
Some information contained herein has been obtained from third party sources believed to be reliable, but has not been independently verified by us; its accuracy or completeness is not guaranteed. Our commentary is based on information considered to be reliable, but no representation is made that it is accurate or complete, and should not be relied upon as such.
The views expressed represent the opinions and beliefs at the time of this commentary and are not meant as a market forecast. These views are subject to change at any time based on market or other conditions and Good Life Advisors disclaims any responsibility to update such views. This information may not be relied on as advice or as an indication of trading intent on behalf of any portfolio. Portfolio investments may change at any time.
Economic and performance information referenced is historical and past performance does not guarantee future results. References to future returns are not promises or estimates of actual returns we may achieve, and should not be relied upon.
No investment strategy or risk management process can guarantee returns or eliminate risk in any market environment. Investing in securities involves risk of loss. Stock and Bond prices can decline significantly in response to adverse market conditions, company-specific events, and other domestic and international political and economic developments. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future.
While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Weekly Market Update | Week 8, 2024
US equities were lower last week, as heavy selling Thursday and Friday sessions reversed earlier strength that saw the S&P 500 hit fresh record closes on Tuesday and Wednesday. The equal-weight S&P 500 (RSP) outperformed the cap-weighted index by around 100 bp this week after two straight weeks of underperformance. The tech-heavy Nasdaq was also an underperformer with some sizable drags from Magnificent 7 names. Other underperformers included cruise lines, airlines, trucking, managed care, homebuilders, home improvement and housing-linked retail, internets, investment banks, moneycenter banks, copper and aluminum. Outperformers included China tech, GSEs, pharma, toys, dollar stores, food and beverage, cosmetics, energy, and telecom. Treasuries were a bit firmer across the curve. The dollar index was little changed, though yen strength was the biggest story in FX. Gold was up 2.1% for the week, also setting a fresh record this week. Bitcoin futures were down 2.8%. WTI crude was down 0.2%.
This week saw more concerns around Washington and Trump 2.0 uncertainty. There was little progress around the budget as Trump endorsed the House budget while the Senate continues to work on its own separate bill. Some GOP lawmakers have warned negotiations are not going well ahead of the March 14th shutdown cliff. It was also another volatile week of tariff headlines. Trump said he would likely impose 25% tariffs on autos, semis, and pharmaceutical imports as of early April, while the administration continued to float tariff revenues replacing taxes, which some view as a growing risk of a harsher tariff regime, rather than tariffs just being used as a negotiating tool. However, Trump also said this week a new China trade deal is possible, while the EU said it is ready to discuss cutting tariffs to avoid a trade war with Washington, both of which may hint at an ultimately softer stance for the Trump administration on trade.
Other pieces of the bearish narrative included some cautious Walmart earnings takeaways, geopolitical risks, broader growth worries following this week’s data (PMIs, housing market), and inflation concerns. Some also flagged extended sentiment/positioning following this week’s selloff in momentum and retail favorites/meme stocks following a big recent ramp in speculative retail flows. Pieces of the bullish narrative included some Treasury support following the Fed’s signaling that it would slow or pause QT mid-year, and Treasury Secretary Bessent’s comment that the US is a ways off from boosting longer-term debt sales.. The Citi Economic Surprise Index also turned negative this week, which some said could ultimately add support for more dovish Fed policy path moving forward. Goldman Sachs economists this week flagged some weaker retail sales datapoints (Walmart, restaurant commentary), but said it could be due to weather, and noted a healthy macro backdrop for consumers.
Data this week included February flash Manufacturing PMI ahead of consensus, though flash Services missed and fell into contraction for the first time in just over two years, with the report flagging uncertainty over federal government policies. Final Michigan Consumer Sentiment also fell, with 1Y inflation expectations unchanged from the preliminary print at 4.3%, the highest since Nov-23, while 5Y inflation expectations ticked up 0.2pp from the preliminary print to 3.5%, the highest since 1995. Initial claims for the week to 15-Feb were a bit higher than expectations, though some analysts focused on rising DC-area claims following recent federal government layoffs. The February Philly Fed Index fell over 26 points m/m to 18.1, missing 20.0 consensus, with prices paid and prices received highest since Q4-22. February Empire State Manufacturing Index posted a surprise positive print, though the prices indexes also rose. A busy week of housing data included February NAHB builder confidence, which missed and fell to a five-month low of 42. January existing home sales also missed, which some said reflects concerns around rates, prices, and softening demand.
Fed -It was a fairly quiet week around the Fed. This week’s January FOMC meeting minutes were mostly in line with expectations, though did note that many officials expect the balance sheet runoff to end in mid-2025. There was a lot of Fedspeak this week, though officials mostly continued to stress the narrative around patience and data dependence, while some continued to note uncertainty around the inflationary impact of Trump policy proposals. March rate cut odds continue to hold around 2%, unchanged w/w. The first cut is priced in for July, while the market is pricing around 40 bp of cuts for 2025, little changed w/w.
Total Fed Holdings Continue to come down. Current level is 6.782 trillion. That’s down 2.183 trillion form the high in April 2022.
Fixed Income
Yield Curve
January FOMC Statement January Minutes Credit, Liquidity and Balance Sheet Federal Reserve Dot Plots
Treasury.gov yields FOMC Policy Normalization Statement Longer- Run Goals Jan 2024
Foreign Exchange Market
Energy Complex
The Baker Hughes rig count gained 4 last week. There are 586 oil and gas rigs operating in the US – Down 37 from last year.
Metals Complex
Employment Picture
Weekly Unemployment Claims – Released Thursday 2/20/2025 – In the week ending February 15, the advance figure for seasonally adjusted initial claims was 219,000, an increase of 5,000 from the previous week’s revised level. The 4-week moving average was 215,250 a decrease of 1,000 from the previous week’s revised average.
December Jobs Report – BLS Summary – Released 2/7/2025 – The US Economy added 143k nonfarm jobs in January and the Unemployment rate declined to 4.0%. Average hourly earnings increased 17 cents to $35.87. Hiring highlights include +44k Healthcare, +34k Retail Trade, +32k Government, and +22k in Social Assistance.
Job Openings & Labor Turnover Survey – JOLTS – Released 2/4/2025 – The number of job openings decreased to 7.6 million on the last business day of December, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations was little changed at 5.5 million and 5.3 million, respectively. Within separations, quits (3.2 million) decreased and discharges (1.8 million) changed little.
Employment Cost Index – Released 1/31/2025 – Compensation costs for civilian workers increased 0.9% for the 3-month period ending in December 2024. Wages and salaries increased 0.9% and benefit costs increased 0.8% from September 2024. The 12-month period ending in December 2024 saw compensation costs increase by 3.8%. The 12-month period ending December 2023 increased 4.2%. Wages and salaries increased 3.8 percent over the 12-month period ending in December 2024 and increased 4.3 percent for the 12-month period ending in December 2023. Benefit costs increased 3.6 percent over the 12-month period and increased 3.8 percent for the 12-month period ending in December 2023. This report is published quarterly.
This Week’s Economic Data – Blue links take you to data source
Housing Starts – Released 2/19/2025 – January housing starts came in at 1,366,000, 9.8% below the December estimate and is 0.7% below the January 2024 rate. Building permits were 0.1% above the December rate at $1,483,000 but is 1.7% below the January 2024 rate.
Recent Economic Data – Blue Links bring you to data source
Industrial Production and Capacity Utilization – Released 2/14/2025 – Industrial production increased 0.5% in January after rising 1.0% in December. Manufacturing decreased 0.1%. Utilities output increased 7.2%. Mining decreased 1.2%. Total industrial production in January was 2.0% above its year-earlier level. Capacity utilization increased to 77.8% in January, a rate that is 1.8% below its long-run average.
Retail Sales – Released 2/14/2025 – Headline retail sales were down 0.9% in January but are up 4.2% above January 2024.
Producer Price Index – Released 2/13/2025 – The Producer Price Index for final demand increased 0.4 percent in January, seasonally adjusted. Final demand increased 0.5 percent in December and 0.2 percent in November. On an unadjusted basis, the index for final demand moved up 3.5 percent for the 12 months ended in January.
Consumer Price Index – Released 2/12/2025 – The Consumer Price Index for All Urban Consumers increased 0.5% in January on a seasonally adjusted basis, after increasing 0.4% in December. Over the last 12 months, the all items index increased 3.0 percent before seasonal adjustment.
Consumer Credit – Released 2/7/2025 – Consumer credit increased at a seasonally adjusted annual rate of 2.4 percent in December. Revolving credit increased at an annual rate of 4.8 percent, while nonrevolving credit increased at an annual rate of 1.6 percent. During the fourth quarter, consumer credit increased at a seasonally adjusted annual rate of 4.2 percent, while in December it increased at a seasonally adjusted annual rate of 9.6 percent.
U.S. Trade Balance – Released 2/5/2025 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $98.4 billion in December, up $19.5 billion from $78.9 billion in November. December exports were $266.5 billion, $7.1 billion less than November exports. December imports were $364.9 billion, $12.4 billion more than November imports. The December increase in the goods and services deficit reflected an increase in the goods deficit of $18.9 billion to $123.0 billion and a decrease in the services surplus of $0.6 billion to $24.5 billion.
PMI Non-Manufacturing Index – Released 2/5/2025 – Economic activity in the services sector expanded in January for the seventh consecutive month. The Services PMI® registered 52.8 percent 1.2 percent lower than December’s reading of 54.0 percent.
PMI Manufacturing Index – Released 2/3/2025 – The January Manufacturing PMI registered 50.9 percent, 1.7 percent higher compared to December. The overall economy continued in expansion for the 57th month after one month of contraction in April 2020. The New Orders Index continued in expansion territory, registering 55.1 percent, 3.0 percentage points higher than the 52.1 percent recorded in December. The January reading of the Production Index (52.5 percent) is 2.6 percentage points higher than December’s figure of 49.9 percent.
U.S. Construction Spending – Released 2/3/2024 – Construction spending during December 2024 was estimated at a seasonally adjusted annual rate of $2,192.2 billion, up 0.9 percent from the November estimate of $2,180.3 billion. The December figure is 4.3 percent above the December 2023 estimate of $2,101.3 billion.
US Light Vehicle Sales – Released 1/31/2024 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 16.798 million units in December.
Chicago PMI – Released 1/31/2025 – Chicago PMI remained in contraction territory in January but rose to 39.5 from 36.9 points in December. The latest reading indicated that Chicago’s economic activity contracted for the 14th successive month in January. New orders rebounded by 13.8 points. Production increased by 4.0 points, matching the level seen in November. Inventories increased by 14.9 points, returning to expansionary levels for the first time since November 2023, following four consecutive months of decline. However, employment dropped 9.0 points, to the lowest level recorded since June 2020. Regarding price development, prices paid eased 2.7 points, the fourth successive fall and the lowest level since July 2024.
Personal Income – Released 1/31/2025 – Personal income increased $92.0 billion (0.4 percent at a monthly rate) in December. Disposable personal income (DPI)—personal income less personal current taxes—increased $79.7 billion (0.4 percent). Personal consumption expenditures (PCE) increased $133.6 billion (0.7 percent).
Advance Estimate of 4th Quarter 2024 GDP – Released 1/30/2025 – Real gross domestic product (GDP) increased at an annual rate of 2.3 percent in the fourth quarter of 2024, according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent. The increase in real GDP in the fourth quarter primarily reflected increases in consumer spending and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased.
Durable Goods – Released 1/28/2025 – New orders for manufactured durable goods in December, down four of the last five months, decreased $6.3 billion or 2.2% to $276.1 billion, the U.S. Census Bureau announced today. This followed a 2.0% November decrease. Excluding transportation, new orders increased 0.3%. Excluding defense, new orders decreased 2.4%. Transportation equipment, also down four of the last five months, led the decrease, $6.9 billion or 7.4% to $86.1 billion.
Consumer Confidence – Released 1/28/2025 – Consumer Confidence decreased from 109.5 to 104.1 in January. The Expectations Index which is based on consumers’ short-term outlook for income, business, and labor market conditions, fell 2.6 points to 83.9, just above the threshold of 80 that usually signals a recession ahead. Consumer confidence has been moving sideways in a relatively stable, narrow range since 2022. January was no exception. The Index weakened for a second straight month. All five components of the Index deteriorated but consumers’ assessments of the present situation experienced the largest decline. Notably, views of current labor market conditions fell for the first time since September, while assessments of business conditions weakened for the second month in a row. Meanwhile, consumers were also less optimistic about future business conditions and, to a lesser extent, income. The return of pessimism about future employment prospects seen in December was confirmed in January.
New Residential Sales – Released 1/27/2025 – Sales of new single‐family houses in December 2024 were at a seasonally adjusted annual rate of 698,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 3.6 percent above the revised November rate of 674,000 and is 6.7 percent above the December 2023 estimate of 654,000. The median sales price of new houses sold in December 2024 was $427,000. The average sales price was $513,600.
Existing Home Sales – Released 1/24/2025 – Existing home sales in December increased 2.2% from November and increased 9.3% year over year. Existing home sales increased to 4.24 million in December seasonally adjusted. The median price of existing homes for sale increased to $404,400, up 6.0% from one year ago.
This week we get data on Existing Home Sales, New Residential Sales, Consumer Confidence, Durable Goods, the 2nd Estimate of 4th Quarter GDP, Personal Income, and Chicago PMI.
This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any stock, bond, currency or CFD contract.
Some information contained herein has been obtained from third party sources believed to be reliable, but has not been independently verified by us; its accuracy or completeness is not guaranteed. Our commentary is based on information considered to be reliable, but no representation is made that it is accurate or complete, and should not be relied upon as such.
The views expressed represent the opinions and beliefs at the time of this commentary and are not meant as a market forecast. These views are subject to change at any time based on market or other conditions and Good Life Advisors disclaims any responsibility to update such views. This information may not be relied on as advice or as an indication of trading intent on behalf of any portfolio. Portfolio investments may change at any time.
Economic and performance information referenced is historical and past performance does not guarantee future results. References to future returns are not promises or estimates of actual returns we may achieve, and should not be relied upon.
No investment strategy or risk management process can guarantee returns or eliminate risk in any market environment. Investing in securities involves risk of loss. Stock and Bond prices can decline significantly in response to adverse market conditions, company-specific events, and other domestic and international political and economic developments. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future.
While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Data Sources:
Conference Board Economic Indicators Bureau of Economic Analysis (BEA) Congressional Budget Office (CBO) U.S. Bureau of Labor Statistics (BLS) Federal Reserve Economic Data (FRED Charts)
CME Fed Watch U.S. Treasury – Yields U.S. Census Bureau Institute for Supply Management (ISM) Weekly DOL Employment Data BLS Monthly Jobs Report JOLTS All capital in one visualization 2020
US Energy Admn (EIA) BLS Consumer Price Index CPI BLS Producer Price Index PPIAtlanta Fed GDPNOW NY Fed Nowcast GDP US Census Bureau Housing Starts U.S. Energy Admn
Consumer Credit USCB Retail Sales Construction Spending Federal Reserve Dot Plots 2017 NY Empire Index Philadelphia Federal Reserve P/E Ratio Data -Yardeni Research
Technical Analysis Info: Koyfin.com StockCharts.com – Financial Charts Exponential vs Simple Moving Average
Other links: 1973 Arab Oil Embargo Hunt Brothers Silver Asian Contagion Long-Term Capital bailout
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