Being that we are finishing up a holiday week, it should not come as too much of a surprise that trading across the global marketplace was a bit lighter than normal. While this much is true, we were surprisingly dealt a good bit of economic data from the United States. Unfortunately, due to the aforementioned slow nature of the economic marketplace this week, it is difficult to truly gauge how investors have interpreted this week’s worth of data.
As we look ahead to the upcoming week, I imagine that it will, in many ways, be exactly like this week’s trading session. After all, with the New Year’s Eve and New Year’s Day holidays happening towards the end of the week, most investors, traders, and business people will be spending time with friends and family more readily than participating in trading and investing.
Contrasting Homes Data Dealt
For most of the past year, one sector of the US economy that has consistently performed well is the housing market. Whether it be new or old homes, the stronger US economy brought about sales figures that seemed to get better and better with each passing month. November, however, a bit of a different story was told as the data figures showed that sales of existing homes fell by quite significant margins during the Thanksgiving month.
Compared to October, sales of existing homes during the month of November fell by more than 10% which, as you can probably expect, is a sizeable decrease. Before investors were able to descend into a panic, however, the National Association of Realtors was quick to point out that slow sales figures are a likely the result of a new mortgage rule that was just recently implemented. The NAR went on to say that as the market adjusts to this new rule, they expect that sales figures will begin to normalize.
A day after existing homes sales data was dealt, the market was on the receiving end of some more homes data, this time regarding new home sales. The Commerce Department’s report held that sales of new homes during November improved by more than 4% from the month previous. Though it is nice to see these figures improving, it must be noted that expectations were for new home sales to rise by more than the roughly 4% that they did.
Finally, this week also played host to a durable goods report from November that missed the mark by quite a bit. Orders for non-military aircraft fell off significantly during November, and this is a major part of the reason behind why this week’s report was so poor.
USD Has Poor December
Despite the fact that the Federal Reserve recently decided to hike interest rates, the US Dollar is more than likely going to finish the month and year having lost at least some value. Even though this may be a poor way to finish the year, it is the USD’s first month of losses since April. What’s more, most economic and currency experts agree that the future looks incredibly promising for the greenback. This grows even truer if the Fed continues to hike interest rates.
At this juncture, there is a strong contingent of investors who are expecting to see interest rates hike up to four times during 2016. The increases will be gradual in nature, but so long as the lending rate inches higher, it is believed that the US Dollar’s value will as well. This is not necessarily favorable for gold nor silver, but it is something that should be considered a very real possibility.