Weekly Market Commentary December 23rd to December 27th 2024

In a week filled with holiday festivities, there was very little economic data. We received further information on the housing market in the form of Building Permits and New Home Sales, and we received information on Durable Goods sales.

The number of building permits issued in November was revised down from the preliminary estimate earlier in the month to 1.493 million units, 5.2% higher than October. Permits for single-family units rose more meaningfully in the southern United States than anywhere else. This also held true for new home sales, as builders and consumers in the South sealed deals that had been delayed by storms, while buyers took advantage of heavy sales incentives. Furthermore, inventory for new homes for sale increased to the highest level since the end of 2007, giving buyers more to choose from and helping with affordability. As a result, sales increased 14% in the South and 5.9% nationwide to a 664,000 annualized pace.

Durable Goods orders declined 1.1% in November as transportation trends remain volatile. The surge in sentiment following the Presidential election has yet to come through into the numbers, but it is expected to in the coming months. Businesses are more optimistic on the economy improving which has led to a rise in capex intentions, an indication of increased goods orders on the horizon.

Equities showed signs of indecision last week, with all three indices closing almost perfectly between their respective weekly highs and weekly lows. The S&P 500 closed 0.7% higher to 5,971, the Nasdaq 0.8% higher to 19,722, and the Dow Jones 0.4% higher to 42,992. Yields continued higher with the 10-Year U.S. Treasury yield reaching 4.63% and the 2-Year reaching 4.33%, a positive 30bp spread not seen since June of 2022.

This week will also be light with economic data, with manufacturing data being the most noteworthy.