This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Stocks on Wall Street have today advanced from the record closing levels set by the Dow and S&P yesterday and by late-morning in New York, the Dow had achieved gains of 0.22% or 35 points at 16,329, while the more comprehensive S&P 500 index rose 0.23% to 1832.1.
Durable goods orders jumped 3.5% last month, bouncing back from October’s 0.7% drop (amended up from the 2.0% fall that was originally reported). Stripping out the volatile transportation component, orders were still up 1.2%, a result that surpassed the expectations of analysts polled by Reuters. This is good news for the manufacturing sector and suggests companies have greater confidence to invest now that they have put the government shutdown behind them.
New homes sales declined 2.1% in November to an annualised rate of 464,000, according to the US Commerce Department, while the Federal Housing Finance Agency said US house prices climbed 0.5% in October, the twenty-first consecutive increase in its purchase only house price index.
The drop in new home sales exceeded the expectations of economists and is an encouraging outcome in the context of stronger house prices and a tighter mortgage market, especially coming after October’s high levels (revised up from 444,000 to 474,000), while September was also revised higher, to 403,000 from an originally-reported 354,000.
These are the latest in an extended stretch of signs that the US economy is warming up and that means the Fed looks set to continue on its path of tapering. This is dollar-positive and has seen EUR/USD slip 0.2% today, while the dollar has strengthened 0.16% against the yen to 104.28, not far from a five-year high.
The UK financial market are closed until Friday, but the US markets are open on Boxing Day.