The Data Week Ahead: US Economy Expands, S&P 500 Up On Taper

US
S&P500 +2.42% (1,818.32); NASDAQ +2.59% (4,104.74); DJIA +2.96% (16,221.14)

This week’s reports:

Q3 2013 GDP Growth Annualized was revised to 4.1%, its strongest since Q4 2011 and up from a previous estimate of 3.6%. Inventories accounted for a third of the increase, showing companies were confident about the prospects for demand, while consumer spending on services and corporate investment were also revised upwards.

Q3 2013 Unit Labor Costs fell 1.4% from Q2’s +0.5%. Non-farm Productivity rose 3.0% from Q2’s +1.8%.

November’s Leading Indicators rose 0.8% from October’s +0.2%.

November’s CPI rose 1.2% y/y from October’s +1.0% y/y. Core CPI rose 1.7%, the same as in October.

December’s NY Empire State Manufacturing Index rose to 0.98 from November’s -2.21.

December’s Markit Manufacturing PMI (prelim.) fell to 54.4 from November’s 54.7.

November’s Industrial Production rose 1.1% from October’s +0.1%.

December’s Philadelphia Fed Manufacturing Survey rose to 7.0 from November’s 6.5.

December’s NAHB Housing Market Index rose to 58 from November’s 54.

November’s Housing Starts jumped 22.7% to an annual pace of 1.091M from October’s pace of 891K. Building Permits rose to an annual pace of 1.007M from October’s 974K.

November’s Existing Home Sales fell 4.3% to an annual pace of 4.90M from October’s pace of 5.12M.

Initial Jobless Claims for the week ending December 13th rose by 10K to 379K.

Continuing Jobless Claims for the week ending December 6th rose by 94K to 2,884K.

US stocks rose as a report showed the economy expanded in the third quarter at a faster rate than previously estimated. The S&P 500 posted its biggest advance since October and erased a loss for the month after the Fed’s decision to slow the pace of its stimulus boosted investor confidence that the recovery is on course.

The Federal Reserve has announced that it had decided to trim its monthly bond purchases to $75 billion from $85 billion, taking the first step toward unwinding the monetary stimulus that has helped the economy recover from the worst recession since the 1930s. Bernanke said that the Fed may taper its buying by about $10 billion at each monthly meeting, if the economy improves as forecast.

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