Weekly Market Outlook – The Bulls Held The Line Where They Absolutely Had To


Stocks lost ground last week, as the previous week's action suggested would be the case. The market didn't break below the key floors that had to remain intact, however, keeping stocks in the hunt for a renewal of the rally that got rolling in late September. Traders seem to still be counting on a stimulus package coming through sooner or later... sooner than later.

The major market indices are just one bad day away from a pretty significant breakdown though, and given all the political uncertainties in place at this time, traders need to be ready for all contingencies.

We'll look at the prospective upsides and downsides below, as usual. First though, let's look at last week's big economic announcements and preview what's on the dance card for this week.

Economic Data Analysis

There wasn't really a lot to think about last week, although it was a pretty big week for real estate. We got last month's existing home sales, as well as last month's housing starts and building permits. In short, home-buying and home-building remain pretty strong. Starts improved to an annualized pace of 1.553 million, topping expectations, and permits of 1.415 million didn't quite meet expectations, but easily cleared August's pace of 1.388 million. Both figures are among the best we've seen in years, and point to at least solid demand for housing in spite of COVID's impact, though starts aren't quite back up to late-2019's levels.

Building Permits and Housing Starts Charts

Source: Census Bureau, TradeStation

In the same vein, sales of existing homes soared to a pace of 6.54 million, easily exceeding the expected 6.1 million. We'll get new home sales data this week -- more on that below. Everything else is on the grid.

Economic Calendar

Source: Briefing.com

As was noted, this week we'll hear about last month's new home sales. Existing home purchases were up firmly, and economists are modeling for a similarly strong print on the new home sales front... an annualized pace of 1.022 million. That's only up a little from August's level, but August's level was also a sky-high print.

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