Pre-Markets Strongly Up Again; Indexes in Green for Week, YTD

Friday, January 17, 2025

Pre-market futures are up again today, after taking a breather Thursday following Wednesday’s relief rally on softer Consumer Price Index (CPI) numbers. The Dow has now climbed into positive territory over the past month of trading; all major indexes are in the green year-to-date. The Dow is up another +238 points, while the S&P 500 has gained +44. The Nasdaq is leading again, +238 points, and the small-cap Russell 2000 is up +19 at this hour.

Treasury bond yields have come down over the past trading week — by 19 basis points (bps) on the 10-year and 16 bps on the 2-year. Currently, we’re situated at +4.572% on 10s and +4.225% on 2s. These continue to reflect another downward interest rate move from the Fed at some point in the first half of this year.

Housing Starts/Building Permits Mixed for December


For headline Housing Starts last month, we see the best performance since February of last year: 1.499 million seasonally adjusted, annualized units heartily outperformed the 1.33 million expected. This follows the previous month’s slightly upwardly revised 1.294 million seasonally adjusted, annualized units, which represents the weakest monthly print since June of 2020.

Single-family starts grew by +2% month over month, but Multi-family — which had been cooling off due to oversupply in recent months — stormed back, +59% for December. With mortgage rates remaining above +7% for now (unless interest rates start coming down again), homebuilders see a need for more rental units; thus the growth on the Multi-family side.

Preliminary (meaning subject to change on future revisions) Building Permits for December — a proxy for future Housing Starts — strode higher than expectations to 1.483 million seasonally adjusted, annualized units. This is still down from the prior month’s downwardly revised 1.49 million. That said, it’s better for the housing market to be closer to 1.5% than 1.4%.

What to Expect from the Market Next Week


As you hopefully know, markets will be closed Monday in observation of the birthday of Dr Martin Luther King, Jr. Tuesday will bring us earnings results from Netflix NFLX after the closing bell, but otherwise — aside from a new LEI report, Existing Home Sales and Consumer Sentiment — it will be a fairly quiet week. Big Q4 earnings reports from companies like Apple AAPL, Microsoft MSFT and Tesla TSLA don’t come out until the following week.

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