US markets were the driving force behind the
capital markets during the past week as headlines over European
sovereign debt took a back seat to solid economic data. Solid employment data, along with better than expected housing numbers, helped buoy riskier assets, allowing commodities and equities to bounce from the prior week’s slump.
The US economy continued to show upbeat data
points during this holiday week, anchored by Initial Jobless Claims.
Jobless claims declined by 4,000 to 364,000 in the week ended Dec. 17, according to the Labor Department. Economists surveyed had forecast claims would rise by 14,000 to 380,000. The decline in claims market the third straight drop in benefit claims, which shows that the recent decline is gaining traction. The four-week average has remained below 400,000 for six consecutive week.
The housing market also received positive news
during the week. Housing Starts last month increased 9.3% to an annual
rate of 685,000 from October. The results were better than forecast. Economists
had expected housing starts would rise by 0.3% to an annual rate of 630,000. The
increase in November was driven by a 25.3% increase in multi-family homes which
are a target of rental investors. Construction of single-family homes, which
made up about 65% percent of the market, rose only 2.3%.
The Commerce data showed that building
permits, which is a reflection of future starts, rose 5.7% from a month
earlier to an annual rate of 681,000, the highest since March 2010. Permits in
November had been projected to fall 1.7% to an annual rate of 633,000. The
combination of better than expected housing data, along with improving
employment data, has created positive sentiment in the US investor
community.
In the commodity sector, crude oil prices
bounced after declining below $95 dollars a barrel after better than expected inventory data helping bulls gain some traction.
U.S. commercial crude oil inventories decreased by 10.6 million barrels from the previous week, a much larger draw than expected. Total motor gasoline inventories decreased by 0.4 million barrels last week and distillate fuel inventories decreased by 2.4 million barrels. Total commercial petroleum inventories decreased by 18.2 million barrels last week. The large draws in inventory came despite a decline in demand of more than 5% year over year.
|
|
