((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
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Major US indices slightly green; Nasdaq up about 0.6%
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technology sector leads S&P 500 gains; public services are lagging behind
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The Euro STOXX 600 index loses ~0.3%
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Gold, dollar ~flat: drop in crude and bitcoin
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10-year US Treasury yield rises to ~4.17%
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YIN/YANG DATA FOR FRIDAY: HOUSING SALES, UMICH
Investors headed into the weekend with a pair of mismatched economic indicators, suggesting the housing market has bottomed out even as consumer sentiment has rebounded.
Sales of used U.S. homes unexpectedly fell 1% in December to 3.78 million units at a seasonally adjusted annualized rate – the lowest figure since 2010 – according to the National Association of Realtors USEHS=ECI.
The consensus predicted that there would be no change in the SAAR figure.
Home sales have been pressured by high mortgage rates and a shortage of supply as homeowners locked in to lower rates have been reluctant to put their homes on the market.
But the average rate on 30-year contracts, which exceeded 7% for 2.5 months, began to calm down.
“Sales over the past month appear to be the lowest point before inevitably rising again in the new year,” writes Lawrence Yun, NAR chief economist. “Mortgage rates are significantly lower than two months ago, and more inventory is expected to hit the market in the coming months
Still, weak housing data could prompt the Fed to pivot and start cutting policy rates sooner than expected.
Speaking of pivots, let’s turn to the consumer, whose spending represents around 70% of US GDP and whose disposition has brightened considerably this month.
The University of Michigan’s (UMich) preliminary consumer sentiment report for January USUMSP=ECI jumped 9.1 points to 78.8, well above the 70 points forecast by analysts.
The “current conditions” and “expectations” components jumped 10 points and 8.5 points, respectively.
“Consumer sentiment climbed 13% in January to its highest level since July 2021, showing that December’s sharp rise was no fluke,” says Joanne Hsu, director of consumer surveys at the University of Michigan.
Of particular note is the slowdown in inflation forecasts. Consumers now expect inflation of 2.9% a year from now – within reach of the Fed’s 2% target – and 2.8% in five years, suggesting it will take some time to close this last gap.
“Inflation forecasts for the next 12 months have improved convincingly, giving the Fed room to cut rates as soon as March,” says Jeffrey Roach, chief economist at LPL Financial.
(Stephen Culp)
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FOR OTHER FRIDAY POSTS ON LIVE MARKETS:
SUPER ELECTION YEAR PLAYBOOK – CLICK HERE
EU AIRLINES IN THE 4TH QUARTER: OPPORTUNITIES FOR THE MOST BRAVERY – BERNSTEIN CLICK HERE
US STOCKS ARE UP FROM START, WAITING FOR DATA – CLICK HERE
HAS THE REBOUND IN TREASURY BILL YIELDS EXHAUSTED? – CLICK HERE
OPPORTUNITIES IN THE EUROPEAN SECTOR DIVERGENCE IN 2024 – UBS – CLICK HERE
FIRST ECB RATE CUT: APRIL OR SEPTEMBER? – CLICK HERE
FALLING UK RETAIL SALES: A ANALYTS’ VIEW – CLICK HERE
THE STOXX 600 PROGRESS, BUT REMAINS ON A WEEKLY DECLINE – CLICK HERE
THE REBOUND IN EUROPEAN STOCKS SHOULD CONTINUE – CLICK HERE
CHIP RECOVERY CONTINUES, EXCEPT IN CHINA – CLICK HERE