Stock were modestly higher in this holiday shortened week. A fair amount of mixed data was released this week.
- The National Association of Home Builders reported that existing-home sales declined a seasonally adjusted 6.1% in November. From a year earlier existing-home sales were up 2.1%.
- The Commerce Department reported a raft of mixed data this week:
o The US third quarter gross domestic product from 3.9% to 5.0% much better than expectations. This represents an increase from the 2nd quarter’s 4.6% growth. Increased consumer spending particularly on healthcare was credited for the increase. The third quarter was 2.7% higher than a year ago above the 2.6% increase year over year in the second quarter. Of course these robust increases in the 2nd and 3rd quarters come after the contraction of the first quarter. The Federal Reserve expects growth for the calendar year to be in the 2.3% to 2.4% range and next year in the 2.6% to 3.0% range.
o Durable goods orders fell 0.7% in November far below the forecast increase of 3.0%. This decline was mainly due to a decrease in aircraft orders of 7.8% following a rise of 43.5% in October. However, excluding volatile transportation orders, durable goods orders still fell 0.4% in November. Non-defense capital goods orders were flat. Keep in mind these figures are volatile and are subject to large revisions.
o US Consumer Spending rose a seasonally adjusted 0.6% in November. Also October consumer spending was revised from 0.2% to 0.3% increase. Personal income increased 0.4% and real disposable income (adjusted for taxes and inflation) rose 0.5% in November.
o Sales of newly built single-family homes dropped 1.6% in November but also fell the same amount over the past year. The weakness in new home sales has been attributed to tight lending standards and increased home prices.