What We Are Watching This Week
- S&P Case-Shiller home price index (20 cities)
- ISM manufacturing
Highlights From Last Week
- Consumer Confidence
- Durable Goods
- New Home Sales
Major stock indexes posted moderate gains during the final week of the year. The week began on a positive note, continuing the prior Friday’s rally, mainly driven by large-cap growth stocks. The Nasdaq Composite, heavily weighted in technology, led the charge, with the Russell 1000 Growth Index outperforming its value counterpart through Tuesday. However, after Wednesday’s Christmas market closure, the trend reversed, and most indexes declined in the latter half of the week, erasing some earlier gains.
European stocks edged higher during the shortened holiday trading week, with the STOXX 600 Index advancing 0.99% in local currency terms. France’s CAC 40 Index increased by 1.11%, while Germany’s DAX gained 0.50%.
The Conference Board reported their Consumer Confidence Index fell 8.1 points to 104.7, with declines in both the Present Situation Index and Expectations Index. The Expectations Index dropped sharply to 81.1, near the recession threshold. Consumers became less optimistic about future business conditions, employment prospects, and income growth, particularly those over 35 with household incomes between $25K and $100K. Consumer optimism about the stock market declined, with 52.9% expecting stock prices to rise (down from 57.2% in November) and 25% expecting a decline (up from 21.7%). Expectations of higher interest rates increased slightly to 48.5%, while expectations of lower rates fell to 29.3%. Consumer inflation expectations stabilized at 5%, the lowest since March 2020. Buying plans for homes softened, while auto purchases and service spending, like dining and personal care, showed resilience. Mentions of politics and tariffs affecting the economy rose, with 46% of respondents expecting tariffs to increase costs. Business conditions were perceived as weakening, but labor market assessments improved, with more consumers reporting jobs as “plentiful.” However, expectations for job availability and income growth dimmed. The proportion of consumers anticipating a recession remained low, but their financial outlook for the next six months deteriorated. Purchasing plans for big-ticket items were mixed, and vacation spending intentions decreased. The data highlights economic uncertainty and shifting consumer priorities heading into 2025.1
On Monday, the US Census Bureau reported that in November, new orders for manufactured durable goods declined by $3.0 billion, or 1.1%, to $285.1 billion, marking decreases in three of the last four months, according to the US Census Bureau. This follows a 0.8% increase in October. Excluding transportation, orders fell 0.1%, and excluding defense, they dropped 0.3%. Also, down three of the past four months, transportation equipment accounted for the most significant decrease, falling by $2.9 billion, or 2.9%, to $95.5 billion.2
In November 2024, sales of new single-family homes reached a seasonally adjusted annual rate of 664,000, according to the US Census Bureau and the Department of Housing and Urban Development. This reflects a 5.9% increase from the revised October rate of 627,000 and an 8.7% rise from the November 2023 estimate of 611,000. The median sales price of new homes sold in November was $402,600, while the average sales price was $484,800. At the end of November, the seasonally adjusted inventory of new homes for sale stood at 490,000, representing an 8.9-month supply at the current sales pace.3
For the week ending December 21, seasonally adjusted initial claims totaled 219,000, down 1,000 from the prior week’s unrevised 220,000. The 4-week moving average rose to 226,500, an increase of 1,000 from the previous week’s 225,500. Continuing claims across all benefit programs for the week ending December 7 were 1,892,640, reflecting a decrease of 67,676 from the prior week. In the same week of 2023, 1,863,719 claims were filed across all programs.4
| WK | Year To Date | |
| Dow | 0.35% | 14.07% |
| S&P500 | 0.67% | 25.18% |
| Nasdaq | 0.76% | 31.38% |
| S&P400 Mid-cap | 0.46% | 12.84% |
| Russell | 0.10% | 10.73% |
| TSX | 8.00% | 18.30% |
| Oil | 1.10% | -2.00% |
Important Information:
Warren Gerow is an independent investment wealth consultant to Sightline Wealth Management.
Sightline Wealth Management LP (“Sightline”) is an investment dealer and is a member of the Canadian Industry Regulation Organization (CIRO) and the Canadian Investor Protection Fund (CIPF).
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