What to Watch for this Week
We came back from one of the worst weeks on Wall Street with one of the best weeks on Wall Street. The S&P 500 finished the week 2732.22 an increase of 1.35%. With the short week and light calendar, I think we will see many of the prominent newscasters on vacation. The Fed Minutes come out this week, but most attention will be on the rapid and textbook recovery we had last week. Is the coast clear? There are many prognosticators on each side of this debate. Alan Steel describes what is “normal” very colorfully.
So, we should actually “expect” a 5% pullback in three out of every four seasons, a 10% moderate correction at the speed of birthdays, a severe correction with each Summer and Winter Olympic Games, and something between a buildy nose and a bluidy disaster with the regularity of a US Presdential election.
That’s not abnormal, that’s normal.
What we had last year was not normal. Maybe a nice to have since the market seems to move up well with minor corrections.
Global Spotlight
Turkey and India Defend Their Naval Spheres. Naval posturing is on the rise in the eastern Mediterranean and Indian Ocean basin.
The World Awaits Trump’s Trade Verdict. In line with a Section 232 investigation, the U.S. Commerce Department has recommended that President Donald Trump implement a wide range of import restrictions, including global tariffs, to mitigate the “national security risk” from steel and aluminum imports. Trump has 90 days to act.
In South Africa and Israel, Dislodging Leaders Is Easier Said Than Done. Now that Jacob Zuma has successfully negotiated his departure as South Africa’s president, we’ll need to see whether his successor, Cyril Ramaphosa, can ease out of Zuma-era populism and restructure Africa’s most industrialized economy without losing the African National Congress’ base of support.
Riyadh and Moscow Search for Solidarity Amid U.S. Oil Rise. As U.S. oil production rises — it already has surpassed 10 million barrels per day — Saudi Arabia and Russia are trying to negotiate a more lasting pact to counterbalance U.S. production growth.
Russia Prepares for Sanctions. Moscow is building up insulation in the event the West throws on more sanctions.
Brussels Is Getting Overzealous in EU Reforms. In an age of Euroskepticism, it may seem odd that Brussels is making all kinds of proposals aimed at enlarging the European Commission’s powers and creating a supranational government.
Stratfor.com
Economic Calendar
A light calendar for a short week of trading. The Existing Home Sales will be the importment report to watch.
- The median existing home price for all housing types increased 5.8% to $246,800, which was the 70th straight month of year-over-year gains. The median existing single-family home price was $248,100, up 5.8% from a year ago.
- Median home prices were up in all regions: Northeast (+3.0% to $261,400); Midwest (+7.8% to $191,400); South (+5.8% to $221,200); West (+7.3% to $367,400)
- Existing home sales were down 7.5% month-over-month in the Northeast, down 6.3% in the Midwest, down 1.7% in the South, and down 1.6% in the West
- The inventory of homes for sale at the end of December (1.48 million) decreased 11.4% and is 10.3% lower than the same period a year ago. The inventory of existing homes for sale has fallen year-over-year for 31 consecutive months.
- Unsold inventory is at a 3.2-month supply at the current sales pace — the lowest on record — versus 3.6 months a year ago and the 6.0-month supply typically associated with a more balanced market
- First-time buyers were 32% of sales in December, up from 29% in November and unchanged from a year ago
- All-cash sales were 20% of transactions in December, versus 22% in November and 21% a year ago
The key takeaway from the report is that notable supply constraints remain, which will continue to act as a drag on overall sales due to the limited inventory and the high prices on available inventory that is crimping affordability, particularly for first-time buyers.
Here is a list of the U.S. economic events happenning this week.
Briefing.com
Last Weeks Numbers
Review Last weeks numbers here.
