Though Thanksgiving was last week, investors had little to be thankful for. In just four (well, three and a half) trading days, the S&P 500 managed to lose 1.2%, essentially retesting the lows made in late October. Hopes that the rebound effort that got going on in early November would actually go somewhere have been soundly dashed.
That doesn’t mean they should have been. In most regards, little has changed about the health of the economy or corporate earnings. Most of what changed has been the change between investors’ ears… not that such a change isn’t enough to do serious damage.
Still, don’t rule out a quick renewals of the uptrend that petered out last week.
We’ll take a technical look at the market below, as always. First though, let’s run down last week’s economic reports and preview this week’s announcements. There are a couple of biggies in the queue.
Economic Data
The holiday break meant we didn’t get our normal flow of economic announcements, though we still got a few, and several regarding the real estate sliver of the market. On Tuesday we saw a slight uptick in housing starts and a slight dip in building permits. And, on Wednesday we heard October’s sales of existing homes perked up to a pace of 5.22 million.
Housing Starts and Building Permits Charts
Source: Thomson Reuters
New, Existing Home Sales and Inventory Charts
Source: Thomson Reuters
Though encouraging, it’s difficult to say the real estate and construction market is truly better… and it’s still in desperate need of ‘better.’ We’ll round out the picture this week with a look at October’s new home sales on Wednesday. The pros are calling for an improvement, though like existing home sales, one good month won’t alter the bigger trend. It would take at least three months to get the sector back on a firm footing, and with mortgage rates still just a bit off of recent multi-year highs, somehow it doesn’t feel like the real estate arena is healthy.
