Each week I break down events into good and bad. Often there is an "ugly" and on rare occasion something very positive. My working definition of "good" has two components. The news must be market friendly and better than expectations. I avoid using my personal preferences in evaluating news - and you should, too!
This week's news was quite good. If I missed something for the "bad" list, please feel free to suggest it in the comments.
The Good
Rail traffic is improving reports Steven Hansen at GEI. The story is even better if you remove coal and grain.
Technical indicators are strong. Our own technical models remain strongly bullish. Noted technician John Murphy (via Charles Kirk) has this comment:
"There is little doubt that the market's trend is still higher. The fact that it's being led higher by economically-sensitive stock groups like energy, materials, industrials, small caps, and transports is a sign of strength. The fact that tech stocks are starting to strengthen is also a positive sign."
Chemical activity shows continuing strength. Calculated Risk monitors this indicator, which seems to lead industrial production.
Durable goods rebounded nicely to an increase of 4.8%.
Existing home sales were strong at 5.6M SAAR, beating expectations. Calculated Risk cautiously notes that the results do not reflect the recent higher mortgage rates.
Michigan sentiment beat expectations moving to 93.8. Doug Short has a comprehensive review.
The Bad
New home sales fell on an annualized basis. The decline included both multi and single-family residences. Calculated Risk offers perspective. Please compare the measured response here and above on existing home sales. Mortgage rates moved above 4%. Trucking is still declining, but the rate seems lower. Steven Hansen at GEI reviews the mixed picture.
The Ugly Beautiful
At some point, I need to do an update on last week's "Fake News" ugly award. There is a good cyberspace discussion, but that can wait.
As I occasionally do, I want to focus on the positive for a change. Bill McBride of Calculated Risk had an encouraging Thanksgiving post, Five Economic Reasons to be Thankful. Read the whole post, but here is one that might surprise you - household debt levels.
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