Last week was the 8th straight week of gains, the longest such streak for U.S. stocks since 2017. The S&P 500 (SPX) posted its longest winning streak in six years, coming within 1% of its 2021 peak after increasing 0.4% for the week. The Nasdaq Composite (NDAQ) rose 0.9% on the week, though it remains far below its previous high. The Nasdaq-100 (NDX) increased by 0.6%, reaching another all-time high. The Dow Jones Industrial Average (DJIA) inched up 0.1%, remaining at a record high level. There were many factors that came together to keep the party going.
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Most economic data points published in the past month, such as jobs, consumer sentiment, housing, and others, upheld investors’ conviction that the U.S. economy is heading towards a “soft landing,” at worst. The Federal Reserve’s dovish pivot propelled the markets even higher, injecting optimism regarding a softer interest-rate environment in the coming year. On Friday, the Fed’s favorite inflation gauge, Core PCE, which excludes volatile food and energy prices, rose less than expected in November, confirming that the Federal Reserve is winning its fight to curb price increases. The fresh data firmed the markets’ bets that the Fed could start cutting interest rates as early as March, further lifting stock market optimism.
However, with almost three months until the Fed’s March meeting, there could be many economic, geopolitical, and market events that may shatter that optimism, or alternatively strengthen it further. This is why investors are advised to closely follow economic reports that can shed some light on the central bank’s future policy changes.
Here are three economic events that could affect your portfolio this week. For a full listing of all upcoming economic events, check out the TipRanks Economic Calendar.
» October’s Housing Price Index – Tuesday, 12/26 – This report, released by the Federal Housing Finance Agency, measures changes in single-family home prices in the United States. In addition to its role as an indicator of housing price trends, the FHFA HPI also serves as an important indicator for the overall market, as changes in housing prices, which affect consumer confidence and job creation, are an important gauge of upcoming changes in the direction of the economy.
» November’s Pending Home Sales – Thursday, 12/28 – This report, published by the National Association of Realtors, is a leading indicator of future existing home sales. It accurately reflects economic conditions and consumer confidence and is closely watched by investors and policymakers for clues about the health of the economy.
» December’s Chicago Purchasing Managers Index (Chicago PMI) – Friday, 12/29 – This report, published by ISM-Chicago, Inc., captures business conditions across Illinois, Indiana, and Michigan, and is generally accepted as a solid representative of the overall economic conditions. The Chicago PMI serves as a leading indicator, helping policymakers and investors to anticipate changing economic trends in GDP, industrial production, employment, and inflation.
