Stocks recovered some of their beginning-of-the-year losses.
First, the scoreboard:
- Dow: 16,530.9 (+105.8, +0.6%)
- S&P 500: 1,837.8 (+11.0, +0.6%)
- Nasdaq: 4,153.1 (+39.5, +0.9%)
And now the top stories:
- The U.S. trade deficit shrank by more than expected in November. At $34.3 billion, this is the smallest deficit since October 2009. This was helped by a 1.9% drop in oil imports.
- Right away, economists scrambled to raise their estimates for Q4 GDP growth. Here’s Barclays’ Dean Maki: “We have raised our Q4 13 real GDP forecast for the US to 3.0% from 1.5% in response to recent stronger-than-expected data on trade and consumer spending. Today’s trade report showed a healthy gain in real exports in November, along with an upward revision to October’s large gain, which, combined with weak real import growth, suggests that trade will provide a significant positive contribution to real GDP growth in Q4 13. This comes after the November consumer spending report suggested that real consumer spending will post a large gain in Q4 13 (our current tracking estimate is 3.8%). Together with expected solid gains in business and residential investment spending, this leads us to forecast a 3.0% gain in real GDP on the quarter, even though we still expect a negative contribution from inventories.”
- Home prices jumped 11.8% year-over-year in November, reported CoreLogic. On a month-over-month basis, however, prices (excluding distressed sales) climbed by just 0.3%. “It’s too early to tell if the marginal dip in the annual pace of house price inflation in November marks the start of the slowdown in price gains that we are expecting,” Capital Economics’ Paul Diggle wrote clients. “But we are confident that annual price gains will not remain in double-digit territory for much longer.”
- Wells Fargo’s Gina Martin Adams, Wall Street’s most bearish strategist of 2013, is on the bearish end of the spectrum with her new 2014 forecast. She sees the S&P 500 ending the year at 1,850. However, she also said she “wouldn’t be surprised to see the index trade as high as 2,100 and as low as 1,500 at some stage throughout the year.”
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