12/18 - 12/22: What happened in the market this week?

Happy Festivus Eve!

I hope you had an exciting week leading up to the holiday weekend. If you are reading this while scrolling Amazon for some last minute gifts... just know that as I write this, I also have Amazon pulled up on a different browser. We're in this together!

Before we get into the market recap, I want to take a moment to wish you and your family a very Merry Christmas and Happy Holidays! May this time be filled with love, joy, and positivity, and I hope you cherish these next few days with your family and loved ones.

I'll be the first to admit, Christmas has never been one of my favorite holidays. For a long time, to me, Christmas equaled stress. All the shopping and the running around and the lights on the Christmas tree going out so you have to restring it with new ones... ok ok, I got a little carried away there.

However, over the the past couple of years, I've tried to approach Christmas with a different (more positive) mindset. It's not about the gifts or the Christmas trees. Christmas has become a time of reflection. A time to share stories and memories with your family. A time for special traditions and once-a-year activities. A time to take a step back and genuinely appreciate all of the blessings in your life.

So during this Christmas and holiday season... put the stress and anxiety aside, and take a few minutes to reflect on what you are grateful for and to truly appreciate the real meaning of Christmas - to cherish peace and goodwill and to be plenteous in mercy.

Interest rates remained flat this week, with little to no change. This isn't much of a surprise considering the light news week leading up to the holiday. We're still sitting at 6.60% on average for a 30 year fixed mortgage.

Can anyone guess what interest rates were at this time last year? If you had "nearly identical to what they are now" on your bingo card, mark your space! They were right at 6.30% last December, which is a great illustration of the industry that we all work in. Yes, it has been a painful year for business, but when you zoom out and look at the big picture, you can see that it's all part of the cycle. That's why we can't let short-term pain and discomfort get in the way of our long-term outlook and goals.

Core PCE Drops

You've seen me talk about this measure before - Core PCE is the preferred inflation indicator by the Fed. If I had to rank the market announcements for this week, Core PCE would be at the top of the list. Well, to everyone's surprise, it unexpectedly declined 0.1% month-over-month in November, below a flat reading in October, and compared to forecasts of no growth. This was the first decrease in Core PCE since February 2022. This further strengthens the outlook that the Fed's measures of combating inflation are having an impact.

New Construction is HOT

We kicked off the week with an unexpected release of the metric that helps us determine the level of new construction happening throughout the country - Housing Starts.

It was forecasted to come in around 1.37 million, but the real number unexpectedly soared to 1.56 million, which was a 14.8% month-over-month increase from October!

What does this mean and why should you care about it? Housing Starts measures new residential construction... so this is telling us that the new construction market continues to remain strong which in turn should help contribute to new financing opportunities AKA loans!

A Look Ahead

There's only one day you need to be focused on next week, and that's Monday, 12/25. It looks like Santa is going to have clear skies (at least in Western PA), so him and his reindeer shouldn't have any issues flying the sleigh and landing on rooftops.

Reports coming out of the North Pole indicate that we saw an uptick in kids on the Nice List, which is a positive trend as we head into 2024.

As far as economic reports go, as expected, not much happening. The biggest report will be on Thursday, 12/28 which is when the Initial Jobless Claims number will be released for the prior week. Numbers have come in under consensus over the past couple of weeks which indicate a strong economy, and I wouldn't be surprised if that trend continues.

Be Jolly. Be Thankful. Be Safe. And most importantly... Be Merry.

Cheers!