US stocks closed at a fresh all-time high with the S&P 500 climbing nearly 2% on the week. Better than expected housing data, and solid industrial output continued to help riskier assets gain traction. Most sectors were higher in the S&P 500 index, led by communications and utilities, energy shares bucked the trend. Natural gas prices broke down to a 3-year low which weighed on production and development companies.
The week was marked with several milestones. The US and China signed their phase one of their trade deal. And likely more of a truce than a trade deal, markets continued to rise as global growth prospects could recover. China reported in-line GDP data, which closed for the year at 6.1%. The US Senate signed the USMCA trade deal between the United States, Canada and China. This will likely benefit Mexico as it provides the least expensive data.
Housing Starts Surge
US Housing Starts surged to a 13-year high in December, jumping 16.9% to an annual rate of 1.608 million units last month, the highest level since December 2006. The percentage gain was the largest since October 2016. Data for November was revised higher to show homebuilding rising to a pace of 1.375 million units. Expectations were for housing starts to increase to a pace of 1.375 million units in December. Housing starts soared 40.8% year over year in December. An estimated 1.290 million housing units were started in 2019, up 3.2% compared to 2018. Building permits fell 3.9% to a rate of 1.416 million units in December after hitting their highest level in more than 12 years in November.
The Federal Reserve reported that manufacturing production rose 0.2% in December following a revised 1.0% increase in November. Overall industrial output fell 0.3% in December. Excluding motor vehicles and parts, industrial production in December was flat and manufacturing rose 0.5%. Expectations were for overall industrial output and manufacturing output would fall 0.2% in December. On an annualized basis production at factories fell 1.3%.
This article was originally posted on FX Empire
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