10-Year Treasury Yield
Treasury yields drop as investors look for safety after AI sell-off in stocks. U.S. Treasury yields fell on Monday as investors sought out safe-haven assets amid a massive stock market sell-off. The 10-year Treasury yield slipped seven basis points to 4.557%, while the 2-year Treasury yield was last trading at 4.225% after falling close to five basis points.
Chicago Fed National Activity Index - CFNAI
The Chicago Fed National Activity Index (CFNAI) increased to +0.15 in December 2024 from –0.01 in November 2024. Two of the four broad categories of indicators used to construct the index increased from November, and two categories made positive contributions in December. The index's three-month moving average, CFNAI-MA3, increased to –0.13 in December 2024 from –0.26 in November.
New Home Sales
US new home sales beat expectations in December 2024. Sales of new U.S. single-family homes increased more than expected in December, further evidence that housing market activity regained momentum at the end of 2024, though rising mortgage rates remain a constraint.
New home sales rose 3.6% to a seasonally adjusted annual rate of 698,000 units last month, the Commerce Department's Census Bureau said on Monday. The sales pace for November was revised higher to a rate of 674,000 units from the previously reported 664,000 units.
Economists polled by Reuters had forecast new home sales, which account for about 15% of U.S. home sales, rising to a rate of 675,000 units. New home sales are counted at the signing of a contract, and can be volatile on a month-to-month basis. They increased 6.7% year on year in December. An estimated 683,000 new homes were sold in 2024, up 2.5% compared to 2023.
US Dollar Index
A strong dollar because of the still relatively tight monetary policy stance could be making U.S. manufactured goods less competitive on the global market, undercutting exports.
Durable Goods Orders
U.S. durable goods orders fell 2.2% in December, marking the fourth decline in five months and missing market forecasts. Transportation orders plunged 7.4%, leading December’s $6.3 billion durable goods decline to $276.1 billion. New data from the U.S. Census Bureau reveals that durable goods orders decreased by 2.2% in December, falling short of market expectations and marking the fourth decline in the past five months. Total new orders dropped by $6.3 billion to $276.1 billion, following a 2.0% decrease in November.
S&P Case-Shiller HPI
S&P CoreLogic Case-Shiller Index Records 3.8% Annual Gain in November 2024. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 3.8% annual return for November, up from a 3.6% annual gain in the previous month. The 10-City Composite saw an annual increase of 4.9%, recording the same annual increase in the previous month. The 20-City Composite posted a year-over-year increase of 4.3%, up from a 4.2% increase in the previous month. New York again reported the highest annual gain among the 20 cities with a 7.3% increase in November, followed by Chicago and Washington with annual increases of 6.2% and 5.9%, respectively. Tampa posted the lowest return, falling 0.4%.
FHFA Home Price Index
FHFA House Price Index Up 0.3 Percent in November; Up 4.2 Percent from Previous Year. U.S. house prices rose 0.3 percent in November, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI®). House prices rose 4.2 percent from November 2023 to November 2024. The previously reported 0.4 percent price growth in October was revised upward to 0.5 percent.Year-over-year, prices rose 4.2% in November 2024.
Consumer Confidence Index - CCI
Consumer confidence falls on ‘softer’ jobs market. Consumer confidence fell to 104.1 level this month mainly on a “softer” jobs market, according to LPL Financial Chief Economist Jeffrey Roach. An index of consumer confidence fell in January for a second straight month, with views of the labor market falling for the first time since September, according to a report Tuesday from the Conference Board.
Money Supply
M2 Money Supply Approaches All-Time High, Bullish Signal for Crypto. The U.S. M2 money supply continued to increase in December a bullish catalyst for risk-on assets. he U.S. M2 money supply continued to increase in December 2024, now shy of its all-time high of $22 trillion. An increase in the M2 money supply is a bullish catalyst for risk assets. The U.S. M2 money supply increased in December to $21.5 trillion, just shy of its all-time high.Continued growth in the M2 money supply is a bullish indicator for risk assets as it indicates more liquidity is entering the system, which typically finds itself in risk-assets first. The M2 money supply has clocked in a new monthly high every month since January 2024. The M2 money supply influences CPI by affecting inflation trends. While the Federal Reserve is actively tightening through quantitative easing and keeping the Fed funds rate at an elevated level while trying to bring CPI back down to its 2% inflation target, the M2 money supply continues to grow. The M2 money supply measures the total amount of money in circulation within an economy, including both liquid and less liquid assets. Meanwhile, the CPI index tracks the average price change of goods and services over time, which indicates inflation.
MBA Purchase Applications
Mortgage demand drops further, even as interest rates settle. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) remained unchanged last week at 7.02%. Applications to refinance a home loan dropped 7% for the week and were 5% higher than the same week one year ago. Applications for a mortgage to purchase a home fell 0.4% from one week earlier and were 7% lower than the same week one year ago. Applications to refinance a home loan dropped 7% for the week and were 5% higher than the same week one year ago. Interest rates are now 24 basis points higher than they were a year ago, so there are precious few who can benefit. The vast majority of homeowners have mortgages with rates well below what is being offered today..
Retail Inventories Adv
Wholesale inventories fell 0.5% while stocks at retailers declined 0.3% last month.
Wholesale Trade Adv
Wholesale inventories fell 0.5% while stocks at retailers declined 0.3% last month.
US International Trade in Goods Adv
Record US goods trade deficit seen cutting into fourth-quarter GDP growth. Goods trade deficit surges 18.0% to $122.1 billion in December 2024. Goods imports increase 3.9%; exports decline 4.5%. U.S. trade deficit in goods hits record high just before Trump took office. It won’t be easy to reduce them. Imports spike in December ahead of Trump tariffs. The U.S. posted a record trade deficit in goods in 2024, spotlighting what is likely to be a constant eyesore under the second administration of President Trump, which is encouraging more domestic production. nThe U.S. deficit in goods totaled $1.2 trillion last year, slightly above the prior record set in 2022, the government reported Wednesday.
Oil - Commodities
Oil prices decline after industry data shows rise in crude inventories. Oil prices edged lower on Wednesday on a rise in U.S. crude stockpiles and easing concern over Libyan supply, with U.S. tariffs on Canadian and Mexican imports also in focus. Brent crude futures were down 44 cents, or 0.57%, at $77.05 a barrel by 1400 GMT. U.S. crude futures fell 41 cents, or 0.56%, to $73.36. The White House said on Tuesday that U.S. President Donald Trump still plans to impose 25% tariffs on imports from Canada and Mexico on Saturday.
FOMC Meeting
The U.S. central bank is expected to leave its benchmark overnight interest rate in the 4.25%-4.50% range at the end of a two-day policy meeting on Wednesday, having reduced it by 100 basis points since September. The policy rate was hiked by 5.25 percentage points in 2022 and 2023 to tame high inflation.
The Federal Reserve left unchanged its overnight borrowing rate in a range between 4.25%-4.5%. The decision followed three straight cuts since September 2024. The post-meeting statement offered a somewhat more optimistic view on the labor market while dropping a key reference from the December statement that inflation “has made progress toward” the Fed’s 2% inflation goal. The Federal Reserve held its key interest rate in check Wednesday, reversing a recent trend of easing policy as it examines what is likely to be a bumpy political and economic landscape ahead. In a widely anticipated move, the central bank’s Federal Open Market Committee left unchanged its overnight borrowing rate in a range between 4.25%-4.5%.
Earnings - META
Meta shares pop after company beats on revenue. Sales in the fourth quarter jumped 21% year over year while net income grew 49% to $20.8 billion from $14 billion a year earlier.Meta shares were up slightly in after-hours trading on Wednesday after the company reported fourth-quarter earnings that beat on the top and bottom lines. Here is how the company did compared with estimates from analysts polled by LSEG: Earnings per share: $8.02 vs. $6.77 expected. Revenue: $48.39 billion vs. $47.04 billion expected.
Earnings - MSFT
Microsoft shares slip on weak quarterly revenue guidance.Microsoft’s results for the fiscal second quarter exceeded Wall Street consensus, but revenue guidance for the current quarter did not. The Azure cloud business is dealing with execution challenges and ongoing supply shortages. But Microsoft touted the growth of its artificial intelligence business, which is doing $13 billion in annualized revenue. Here’s how the company did in comparison with Wall Street expectations, based on a survey of analysts by LSEG: Earnings per share: $3.23 vs. $3.11 expected. Revenue: $69.63 billion vs. $68.78 billion expected
Earnings - TESLA
Tesla fourth-quarter results miss estimates as automotive revenue drops 8%. Tesla reported disappointing results on the top and bottom lines. The stock initially fell in extended trading before rebounding. Automotive revenue fell 8% from a year earlier. Tesla reported earnings and revenue for the fourth quarter that missed analysts’ estimates. The stock initially fell in after-hours trading before rebounding. Here is how the company did compared with estimates from analysts polled by LSEG: Earnings per share: 73 cents adjusted vs. 76 cents expected. Revenue: $25.71 billion vs. $27.26 billion expected.
Hedging Gold
mmmmm
Jobless Claims
Jobless claims drop to lowest level in three weeks, supporting Fed’s assessment that labor market is solid. Initial unemployment claims totaled 207,000 for the week ending Jan. 25, a sharp decline of 16,000 from the prior period and well below the forecast for 228,000, the Labor Department reported. Continuing claims, which run a week behind, also fell, down 42,000 to 1.86 million.
Gross Domestic Product GDP
GDP grew at a 2.3% pace in the fourth quarter, less than expected. U.S. growth slowed at end of 2024, GDP shows, but economy looks good under the hood. The U.S. economy grew at a mild 2.3% annual pace in the final three months of 2024, but the details of the report showed an economy on strong footing as the Biden administration handed off to the Trump White House.The rate of increase in gross domestic product, the official scorecard of the economy, slowed in the fourth quarter from a 3.1% growth rate in the third quarter. GDP accelerated at a 2.3% annualized pace in the fourth quarter. Economists surveyed by Dow Jones had been expecting an increase of 2.5% after growth of 3.1% in the third quarter.For the full year, GDP accelerated 2.8%, compared to 2.9% in 2023.
Gross domestic product, a measure of all the goods and services produced across the sprawling U.S. economy during the period Consumer spending surged in the holiday shopping season. Consumer spending rose at a robust 4.2% pace and, as usual, amounted to about two-thirds of all activity.
Pending Home Sales Index
Pending home sales drop sharply in December, as mortgage rates surge back over 7%. Pending home sales dropped sharply in December as mortgage rates climbed. The average rate on the 30-year fixed went from a low of 6.68% on Dec.6 to a high of 7.14% on Dec. 19. Sales fell in all regions, with the West and Northeast seeing the biggest monthly drops with 8.1% and 10.3% decreases, respectively.Signed contracts on existing homes dropped a sharp 5.5% in December from the previous month and fell 5% from the prior year, according to the National Association of Realtors. The drop followed four straight months of gains and is the index was at its lowest level since August.
Earnings - AAPL
Apple’s overall revenue rose 4% in its first fiscal quarter, but it missed on Wall Street’s iPhone sales expectations and saw sales in China decline 11.1%, the company reported Thursday. But shares rose about 3% in extended trading after the company gave a forecast for the March quarter that suggested revenue growth. Here’s how Apple did versus LSEG consensus estimates for the quarter that ended Dec. 28. Earnings per share: $2.40 vs. $2.35 estimated. Revenue: $124.30 billion vs. $124.12 billion estimated
Earnings - AMZN
mmmm
Fed Balance Sheet
Level $6.853 T. Total Assets -W/W $-33.472 B. Reserve Bank Credit - W/W $-20.940 B.
Mortgage Rates
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) remained unchanged at 7.02%, with points increasing to 0.63 from 0.62 (including the origination fee) for loans with a 20% down payment.
Personal Income
Personal income climbed 0.4% as forecast, while spending rose 0.7%.The report Friday also showed that personal income increased 0.4% in December as forecast, while spending rose 0.7%, or one-tenth of a percentage point ahead of the estimate.
Consumer Spending
Consumer spending, which accounts for more than two-thirds of the economy, grew at a 4.2% rate last quarter. That was the fastest since the first quarter of 2023 and followed a 3.7% pace in the July-September quarter. Happy holidays: Consumer spending surges again and keeps U.S. economy in overdrive. Consumer spending is strong for third quarter in a row. he holiday shopping season was a gift of sorts to the economy: Consumer spending surged in December to cap off another strong year of growth and position the U.S. to expand briskly again in early 2025. Consumer spending rose a sharp 0.7% last month, the government said Friday. Economists polled by The Wall Street Journal had forecast a 0.6% increase. Consumer spending surged 0.7% in December, boosting economic growth. The personal consumption expenditures (PCE) price index rose 0.3% last month after an unrevised 0.1% gain in November, the Commerce Department's Bureau of Economic Analysis said on Friday. Economists polled by Reuters had forecast the PCE price index climbing 0.3%. In the 12 months through December, the PCE price index advanced 2.6% after rising 2.4% in November. The data was included in the advance gross domestic product report for the fourth quarter published on Thursday, which showed price pressures picking up in the final three months of the year against the backdrop of robust consumer spending.
Core PCE
Inflation finishes 2024 well above Fed’s 2% target, PCE shows.. Key Fed measure shows core inflation at 2.8%, in line with expectations. Core inflation rose 2.8% year-on-year in December 2024 as forecast. The U.S. central bank tracks the PCE price measures for monetary policy. The Fed on Wednesday left its benchmark overnight interest rate in the 4.25%-4.50% range, having reduced it by 100 basis points since September when it started its policy easing cycle.
Employment Cost Index - ECI
US labor costs rise moderately in fourth quarter. U.S. labor costs rose marginally in the fourth quarter, offering some comfort to Federal Reserve officials after progress lowering inflation stalled at the end of 2024. The employment cost index (ECI), the broadest measure of labor costs, gained 0.9% last quarter after rising 0.8% in the third quarter, the Labor Department's Bureau of Labor Statistics said on Friday. Economists polled by Reuters had forecast the ECI would climb 0.9%. Labor costs increased 3.8% in the 12 months through December after rising 3.9% in the year through September. The ECI is viewed by policymakers as one of the better measures of labor market slack and a predictor of core inflation because it adjusts for composition and job-quality changes.
Chicago PMI
Chicago PMI shows slight recovery, still below forecast.In recent economic news, the Chicago Purchasing Managers' Index (PMI) has posted a new figure, reflecting the current health of the manufacturing sector in the Chicago region. The actual number for the PMI has come in at 39.5. This figure, although showing an improvement, falls short of the forecasted number of 40.3. The Chicago PMI is a crucial economic indicator, with a reading above 50 indicating an expansion of the manufacturing sector, while a reading below 50 suggests a contraction. Therefore, the current PMI of 39.5 still signifies a contracting manufacturing sector in the Chicago region, albeit at a slower pace than before.
S&P 500 Index - Week Performance
Open 2025 at 5,903.26 and close at 5,942.47. Positive 0.83%
Geopolitical Risk
No survivors in American Airlines collision with Army helicopter, officials say. The operation has switched to recovery after 28 bodies were found. Three soldiers were in the Army helicopter, and 64 people were aboard the American Airlines plane.
German inflation was unchanged in January, coming in at 2.8% on an annual basis according to preliminary data from statistics office Destatis.The print was also in line with a Reuters forecast. Friday’s inflation reading is among the last key data points before the German election on Feb. 23.
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