It is the Friday before Christmas and the markets are barely stirring. As is normal, market action is somewhat subdued as many investors have started their holiday vacations. Although you may still see movements in the stock market, it is based upon low trading volume. At this time of year, those that remain trading in the markets have the ability to impact significantly the indices, however any movements are less reflective of true investor sentiment.

For the most part, the economic data continues to show signs that the economy is improving at a slow but steady pace. For now, the euro debt crisis is not contained, however it seems to be one of those things that after so long… we just seem to ignore it.

First Time Jobless Claims hit the lowest level since April 2008. At 366,000, this represents a significant improvement in what we have seen over the last 9 months. Additionally, the trend of claims going down has been sustained now for a month. It seems as if finally the job picture is legitimately improving. By no means are we out of the woods yet however we are heading in the right direction.

The housing market continues to show slow signs of improvement with three key reports all pointing a more promising housing picture.

The Housing Market Index, which indicates builder sentiment on the future of new construction, came in at the highest reading since May of 2010.
Housing Starts jumped a healthy 9.3% in November. Overall the data is quite strong however the only part of the report which limits my enthusiasm is the breakdown of the type of building being done. Multi-family construction represented the majority of the new building, whereas single family home construction only increased 2.3%. The heavy weight on multi-family construction reinforces the sentiment that the demand for rental units is very strong throughout the U.S.
Lastly, Exiting Home Sales rose 4.2% continuing the growth pattern of home sales. Despite the fact that the National Association of Realtors restated home sales figures for the last five years down by average of 14%, the trend for housing is still improving. All the revision by NAR means is that we were worse off than we originally thought we were. The revision does not change the trend of improvement.

Durable Goods Orders continue to improve as well. The consistent increase in this measurement indicates that not only is economic growth happening, but the prospect for economic growth in the coming months remains positive as well.

Finally, Consumer Sentiment also continues to rise. Consumers are spending money and the feeling that 2012 will be better than 2011 has the consumer sentiment index growing steadily.

It is my wish to you reading this newsletter to enjoy whichever holiday you may celebrate. Enjoy your holiday weekend and I look forward to writing to you in my final newsletter for 2011 next Friday.