Consumer Confidence remains quite strong despite the dip in December to 122.1 from 128.6 in November (revised down from 129.5). While consumers were less optimistic about business and job opportunities ahead, expectations are still at historically high levels, and the Conference Board believes economic growth should continue in the upcoming year. According to James Bohnaker of IHS Markit, uncertainty surronding the Republican tax reform, which was passed on December 20, could have lead to some of the decline as the cutoff date for the Conference Board survey was December 15.
On the housing front, buyers took a bit of a break from the frenzied pace of fall with sales of existing home relatively flat, up 0.2% from October and 0.8% higher than the prior year period. Supply weakened in November to 3.4 months, which is the lowest level since inception of the report in 1999 and may have attributed to the pullback in sales. Furthermore, prices continue to accelerate.
According to Lawrence Yun, chief economist for the NAR, "The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear." He continued, "However, new buyers coming into the market are finding out quickly that their options are limited and competition is robust. Realtors say many would-be buyers from earlier this year, stifled by tight supply and higher prices, are still trying to buy a home."
The major indices are all up at midday. Advancers outpace decliners 1750/1088 on the NYSE and 1779/1080 on the Nasdaq. Utilities is leading the way higher as well as strength from Health Care and Real Estate sector, while Consumer Discretionary and Energy lag.
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