US market indexes continued to register new all-time highs last week with strong support from European and Asian markets.
Last week, DOW Jones closed above 16,000 and the S&P 500 (NYSE:SPY) above 18,000 while NASDAQ (NASDAQ:QQQ) is on track to reach the historic 4,000 mark for the first time in 13 years.
Minutes of last week's FOMC meeting revealed that while most Fed members are inclined to scale down bond purchases in the upcoming months, there was no fix time line provided. Ambiguity from Fed members regarding tapering will increase uncertainty in the markets towards the year end. However, Fed Chairman designate Janet Yellen is endorsing persistence of the monthly bond buying program which bodes well for the markets and is less likely to curb investor's risk appetite. The market is not expecting a surprise from the US Federal Reserve's December meeting, which suggests that a Christmas rally may well be on the cards.
Following are Sentiment charts for S&P 500 (NYSE:SPY), DOW Jones, and NASDAQ (NASDAQ:QQQ).
Following is an economic overview for the week November 25 - November 29, 2013.
(All times EST)
Monday, November 25
10:00 — US Pending Home Sales:
US pending home sales fell for a fifth consecutive month in October amid higher borrowing costs and price increases that are adversely impacting the housing recovery. Pending home sales declined 0.6% in October vs. expectations for a 1% gain.
Tuesday, November 26
05:00 — UK Inflation Report Hearing:
During the hearing the BOE Governor and several MPC members will testify on inflation and the economic outlook before Parliament's Treasury Committee. BOE MPC members will vote on where to set the nation's key interest rates and their public engagements are often used to drop subtle clues regarding future monetary policy.
08:30 — US Building Permits:
In August, building permits fell by 3.8% (m/m) as the adjusted annual rate of building permits reached 918K. If building permits continue to fall, it may indicate that US housing market is cooling down.
08:30 — US Housing Starts:
US Census Bureau will release its housing starts monthly update for September 2013. In August 2013, the adjusted annual rate reached 891K, far less than the 917K-unit rate economists had expected, indicating higher mortgage rates have slowed the pace of home sales.
10:00 — CB Consumer Confidence:
In October, consumer confidence index plummeted to 71.2 (month-over-month). The current expectations are that the November index may further decline which may adversely impact the US dollar.
Wednesday, November 27
04:30 — Great Britain Second Estimate Q3 GDP (q/q):
This report will present the revised estimate of Q3 GDP growth rate for the British economy. Based on the preliminary estimate for Q3, Britain's economy grew by 0.8%. Any surprises in the revised rate may impact the British pound.
08:30 — US Core Durable Goods:
Monthly report for October may indirectly indicate the shifts in US demand for commodities. As of September 2013, orders for durable goods advanced 3.7%, led by a 57.5% increase in aircraft bookings. However, excluding the volatile transportation sector, new orders dipped 0.1% in September to mark the third straight decline. For the upcoming October report economists are expecting durable goods orders to increase by 0.5%.
08:30 — US Unemployment Claims:
Weekly report will refer to changes in initial jobless claims for the week ending on November 22, 2013. Last week jobless claims decreased by 21K to reach 323K. This upcoming weekly update may affect the US dollar and consequently commodities and stocks markets.
10:30 — Crude Oil Inventories:
EIA (Energy Information Administration) will publish its weekly report on US oil and petroleum inventories for the week ending on November 22, 2013.
Thursday, November 28
05:30 — BOE Governor Carney's Speech:
Governor Carney is expected to hold a press conference about the Financial Stability Report. Volatility is often experienced during his speeches as investors attempt to decipher interest rate clues.
08:30 — Canada Current Account (m/m):
Monthly update presents the trade gap during the last quarter. In the previous update, current account deficit reached C$14.6 billion from April to June compared with a revised C$13.4 billion shortfall in the first quarter.
Friday, November 29
08:30 — Canada GDP (m/m):
Monthly report will present developments in major industrial sectors for September 2013. In August 2013, real gross domestic product increased by 0.3%. For the upcoming report economists expect GDP to rise by 0.1%. This upcoming report may affect the Canadian dollar, which is strongly correlated with commodities prices.
This commentary is for informational purposes only and does not constitute investment advice. The opinions offered herein are not recommendations to buy, sell or hold securities. Market IQ expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.