December 29, 2014
Economic themes: Greece, GDP, Personal Income & Outlays, Durable Goods, Housing.
- Greece: Prime Minister Antonis Samaras failed on his third attempt to elect a president this morning, which is expected to dissolve his government and lead to snap elections in early 2015. Investors are concerned that the far left leaning, anti-austerity Syriza party could take over, which risks compromising Greece’s international bailout. Greek stocks, bonds, and the Euro are all down as a result.
- GDP: Gross Domestic Product was revised to up 5% for the third quarter, marking the strongest quarter since Q3 2003. Gains were seen across health care, recreation, financial services, and software. The price index was up 1.4%, and could fall further given the decline in oil prices, giving the Fed doves plenty of fuel.
- Personal Income & Outlays: Personal income gained by 0.4% in November, and is up 4.2% over the past year. Consumer spending was up 0.6% in November, and is up 4% over the past year. Headline inflation fell by 0.2% in November, and is up 1.2% over the past year, again fueling the Fed doves. Wages seem to be rising at a faster pace, and the consumer is benefitting from falling gasoline prices.
- Durable Goods: Durable orders fell by 0.7% in November, compared to projections of a 3.1% increase, and are up 0.3% over the past year. The weak figure reflects poorly on manufacturing.
- Housing: New home sales fell by 1.6% in November to a 438k unit pace, below forecasts of a 460k unit pace, and median prices fell by 3.2%, though are still up 1.4% over the past year. Supply increased slightly to 5.8 months.
From all of us at Alamo Capital we hope you have a prosperous and happy new year!
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