- Economists see healthy run of price gains for US house prices in November
- US Consumer Confidence Index expected to end the year on a high note
- US manufacturing activity is on track to stay positive in December updates
Several US releases will dominate today’s trading session, starting with the November report on house prices via the S&P Corelogic Case-Shiller Index.
Later, the Conference Board publishes a December update of its US Consumer Confidence Index, followed by regional profiles of manufacturing activity courtesy of two Federal Reserve banks.
US: S&P Case-Shiller Home Price Index (1400 GMT): Residential house prices set a new high in September, rising above the 2006 peak, and the bullish trend is on track to continue in today’s update for October.
Econoday.com’s consensus forecast sees the S&P Corelogic Case-Shiller Home Price Index (HPI) rising 0.5% (seasonally adjusted) for the 20-city benchmark, up slightly from a 0.4% rise in the previous month.
Meanwhile, the year-over-year trend is on track to hold steady at a healthy 5.1% increase. Not surprisingly, the upside price trend has been accompanied by buoyant demand.
Notably, existing home sales rose to a nine-year high last month. “The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates accurately rose from their historically low level have combined to drive sales higher in recent months,” noted the chief economist at the National Association of Realtors last week.
Meantime, home builders are in a cheery mood these days via the Housing Market Index, which jumped to an 11-year high this month.
The advance points to expectations that the residential real estate market will remain upbeat in the new year, as today’s numbers for house prices will likely reaffirm.
US: Consumer Confidence Index (1500 GMT): The post-election revival in consumer confidence is expected to find more support in today’s report from the Conference Board (CB).
The crowd’s looking for CB’s index to inch higher to 108.1 for December, based on Econoday.com’s consensus forecast. If the projection is right, the benchmark will touch another post-recession high.
The case for optimism also looks productive via last week’s December release for the University of Michigan Consumer Sentiment, which surged to a 12-year peak. “An all-time record number of consumers (18%) spontaneously mentioned the expected favourable impact of Trump's policies on the economy,” said the chief economist for surveys at UoM.
Firmer readings for consumer sentiment are showing up in other metrics as well. The Bloomberg Consumer Comfort Index, for instance, recently advanced to its highest reading in nearly two years.
Gallup’s measure of economic confidence is also pointing to a solid improvement since the election. “The latest figure [for the week ending December 18] is up slightly from the index’s previous high of +8 recorded in both of the prior two weeks," the polling group advised last week.
Considering the tailwind of late, it would be surprising if today’s release from the Conference Board conflicts with the latest set of figures.
US: Richmond (1500 GMT) and Dallas (1530 GMT): Fed Manufacturing Indexes Regional data from several Fed banks continues to show that economic activity is picking up in the manufacturing sector and today’s updates for December look set to fall in line with that narrative.
True, the Dallas Fed’s benchmark is projected to dip modest to a positive 7 reading, down from 10.2 in November, according to TradingEconomics.com’s econometric estimate.
Nonetheless, a second straight month above zero will be a minor milestone for this regional benchmark, which was consistently negative for nearly two years before pulling above zero in November.
Meanwhile, the Richmond Fed Manufacturing Index has been delivering mixed messages this year, bouncing back and forth between growth and contraction.
But today’s outlook for a slight improvement to 5 for December (against 4 in the previous month) is expected to deliver the first back-to-back positive readings since the spring.
Data from other sources is also pointing to recovery for manufacturing. Notably, the Markit Flash US Manufacturing PMI edged up to 54.2 in December, a 21-month high that “signalled a robust improvement in manufacturing-sector business conditions.”
Today’s twin updates from two Fed banks appears set to fortify the positive outlook.
Disclosure: Originally published at Saxo Bank TradingFloor.com