Things To Watch

Key S&P 500 Levels

The major U.S. equity averages finished last week on a high note, with the S&P 500 narrowly holding above its 50-day moving average (5,927) on Friday after closing below the important short-term technical level on Wednesday and Thursday. If we see another bout of selling during this holiday-shortened week, the most relevant S&P 500 level to watch will likely be the index’s 100-day moving average (5,752), about 3.2% below its 5,930.85 close last week.

Will New Home Sales Remain Weak?

Sales of new homes in the U.S. (to be released tomorrow morning) are expected to have rebounded 9% last month to an annualized rate of 665,000 units after a 17% decline in October to 610,000 units. This was the lowest reading in 21 months as a pair of hurricanes weighed on activity in Florida, North Carolina and other southeastern states. The median sale price of a new home rose 3% in October to $437,000, the highest in 14 months but 5% below than the all-time high of $460,300 in October 2022. Mixed signals from the homebuilding industry have emerged in recent weeks as Lennar (LEN) management called out worsening home affordability. Yet, the December reading of the National Association of Homebuilders sentiment survey index was tied for its highest level in seven months.

Bitcoin

The digital currency has taken a breather recently, declining 10% after briefly eclipsing $108,000 last Tuesday after a 60% post-election surge. The Federal Reserve’s “hawkish cut” and forecast for less policy easing in 2025 than previously expected seemed to drive a bout of short-term outflows from several of the more popular Bitcoin ETFs. Several commentators have attributed Bitcoin’s recent weakness to profit-taking and suggest it could be a sign of a broader near-term pullback in speculative appetite heading into the end of the year.