U.S. consumer confidence improved further in December, suggesting the economy will continue to expand in 2022 despite a resurgence in COVID infections and reduced fiscal stimulus.  The survey from the Conference Board showed more consumers planned to buy a house and big-ticket items such as motor vehicles and major household appliances as well as go on vacation over the next six months. Inflation concerns eased a bit and households remained upbeat about the labor market.  This will likely help to underpin consumer spending even as government income to households is diminishing.

Sales of previously owned homes in November rose 1.9% from October to 6.46 million units, according to the National Association of Realtors. Sales were 2.0% lower than November 2020.  These sales reflect home closings, so contracts that were likely signed in September and October.  Regionally, month-to-month, sales in the Northeast were unchanged. In the Midwest, they rose 0.7% and in the South they rose 2.9%. In the West, sales increased 2.3%.  Sales likely increased due to a strengthening job market and concerns among potential buyers that mortgage rates will be significantly higher next year.  There were 1.11 million homes for sale at the end of November, down 13% year over year. At the current sales pace that represents a 2.1-month supply.

The Biden administration extended a student loan moratorium that has allowed millions of Americans to put off debt payments during the pandemic.  Under the action, payments on federal student loans will remain paused through May 1. Interest rates will remain at 0% during that period, and debt collection efforts will be suspended. Those measures have been in place since early in the pandemic, but were set to expire Jan. 31.

The major stock averages rebounded sharply yesterday following three days of losses.  Reopening plays, like airlines, cruise lines and entertainment stocks, saw relief buying yesterday.

Shares of Rite Aid are rallying more than 16% after they reported a quarterly profit of 15 cents per share, smashing analysts’ expectations for a quarterly loss of 32 cents per share. The drugstore chain also announced a store-closure program where they expect to close 63 underperforming stores in the coming months.

The aircraft maker Boeing’s shares rose 5% after UPS placed and order for 19 of the company’s 767 freighters. Boeing was also named a top stock pick for 2022 by a few investment banks, saying they sees free cash flow improving dramatically.

According to CNBC the average professional Santa Claus makes between $5,000 and $8,000 during the holiday season, with the best ones making as much as $20,000.
 

US Stocks sold off yesterday following a week where all 3 major US averages lost about 2%.  Travel and Restaurant stocks were the biggest loser as investors worry about the impact of the new COVID variant on the economy.

The Conference Board Leading Economic Index for the U.S. increased by 1.1 percent in November following a 0.9 percent increase in October.  The U.S. LEI rose sharply again in November, suggesting the current economic expansion will continue into the first half of 2022.  Inflation and continuing supply chain disruptions, as well as a resurgence of COVID-19, pose risks to GDP growth in 2022. Still, the economic impact of these risks may be contained. The Conference Board forecasts real GDP growth to strengthen in Q4 2021 to about 6.5 percent (annualized rate), before moderating to a still healthy rate of 2.2 percent in Q1 2022.

Spider-Man made even more money than originally projected.  Spider-Man: No Way Home, the latest movie in the Marvel series, notched a record-breaking opening weekend at the domestic box office by bringing in $260 million.  Only 2019's Avengers: Endgame, one of the biggest blockbusters of all time, opened to larger numbers.
 

U.S. homebuilding surged to an eight-month high in November amid an acute shortage of properties on the market, though higher prices for raw materials and labor shortages remain a constraint.  Housing starts increased 11.8% to a seasonally adjusted annual rate of 1.679 million units last month, the highest level since March.  Permits for future homebuilding increased 3.6% to a rate of 1.712 million units in November.  Starts dropped from the 1.725 million unit-pace scaled in March, which was more than a 14-1/2-year high as builders struggled with shortages and more expensive raw materials.  Nonresidential construction input prices increased by nearly 25% in the 12 months through November, according to producer price data released this week. There is a huge backlog of houses authorized for construction but not yet started.  A survey from the National Association of Home Builders on Wednesday showed confidence among single-family homebuilders rose for a fourth straight month in December, but noted that “finding workers, predicting pricing and dealing with material delays remains a challenge.

New business formation climbed sharply in Oregon as the pandemic recession eased, with entrepreneurs leaping in to start new companies this year at an unprecedented rate.  Oregonians started an average of 4,100 businesses each month over the past year, an increase of more than 25% from the same period in the 12 months before the pandemic, according to U.S. Census Bureau data. That’s the fastest pace in the 17 years for which the government has Oregon numbers.

Federal Reserve officials expect to raise interest rates three times next year as the US central bank adopts a more aggressive approach to tame the highest levels of inflation for decades. The more hawkish interest rate forecasts were published alongside a plan to double the pace at which the Fed “tapers” the huge bond-buying program it put in place at the start of the coronavirus pandemic. It will begin cutting purchases by $30bn a month in January, putting it on track to stop adding to the size of its balance sheet by the end of March — several months earlier than initially expected — and begin to raise interest rates in the months thereafter.

FedEx has laid bare the scale of the online shopping boom in the run-up to the US holiday season peak, reporting its highest quarterly sales on record after the logistics group handled millions of additional packages and implemented surcharges on shipments. Earnings released on Thursday showed FedEx Ground, the company’s small-package ground delivery business in North America, handled an average of 12.3m packages every day in the three months to the end of November, up from 9.6m for the same period a year ago.

McDonald’s announced Thursday it has settled its lawsuit against former CEO Steve Easterbrook, clawing back his severance payment valued at $105 million. The fast-food giant first brought a suit against its disgraced former chief executive in August 2020, claiming that he lied during the company’s internal probe into his behavior before his firing.

The National Federal of Independent Business Small Business Optimism Index increased slightly by 0.2 points to 98.4.  As the end of the year nears, the outlook for business conditions is not encouraging to small business owners as lawmakers propose additional mandates and tax increases.   Owners are also pessimistic as many continue managing challenges like rampant inflation and supply chain disruptions that are impacting their businesses right now.  Small business owners continue to struggle to increase their workforce with 10% of owners citing labor costs as their top business problem and 29% said that labor quality was their top business problem, a 48-year record high.

Oregon job growth picked up in November, with the state adding another 10,000 jobs. That’s more than double last month’s total and 50% above the state’s pace in the prior six months. The numbers are a heartening sign for the state’s economy and suggests that Oregon’s recovery from the pandemic continues, though some sectors like leisure and hospitality remain severely diminished. The state has now recovered 4 out of every 5 jobs lost to the pandemic. Oregon’s unemployment rate fell last month to 4.2%, matching the national rate. November was the 19th consecutive month the state’s jobless rate has declined. It’s now back near pre-pandemic levels, near the lowest point on record.

Prices at the wholesale level surged by a record 9.6% in November from a year earlier, an indication of on-going inflation pressures.  The Labor Department said their producer price index, which measures inflation before it reaches consumers, rose 0.8% in November after a 0.6% monthly gain in October. It was the highest monthly reading in four months.  The 12-month increase in wholesale inflation set a new record, surpassing the old records for 12-month increases of 8.6% set in both September and October.

Shares of the motorcycle maker Harley Davidson jumped about 7% after the company announced their electric motorcycle unit, Livewire, will go public through a merger with a special purpose acquisition company, or SPAC. The deal is valued at about $1.8 billion and will trade on the New York Stock Exchange under the ticker symbol “LVW.”

Shares of the vaccine maker Pfizer jumped more than 4% after a new Israeli study showed its Covid booster shot provides strong protection against severe illness from the omicron variant. Its partner BioNTech saw shares jump about 8.2% on the news. Separately, the company announced it will acquire drug developer Arena Pharmaceuticals for $6.7 billion in cash.  Arena’s shares soared by 79%.
 

US Stocks posted their best week since last February with the S&P 500 reaching a new all-time-high.

According to the Labor Department Inflation accelerated at its fastest pace since 1982 in November, putting pressure on the economic recovery and raising the stakes for the Federal Reserve.  The consumer price index, which measures the cost of a wide-ranging basket of goods and services, rose 0.8% in November, good for a 6.8% pace on a year over year basis and the fastest rate since June 1982.  This will undoubtably put pressure on the Federal Reserve which meets this week and announces their plans for interest rates and monetary policy.  The markets will be watching closely on Wednesday for indications about how soon they might raise interest rates.

The University of Michigan's preliminary take on current month Consumer Sentiment showed the consumer's mood brightening.  The index's December reading unexpectedly gained 3 points to a print of 70.4, moving in the opposite direction than economists predicted.  What was most interesting, was the substantially brightened mood among the survey's lowest-earning respondents

Inflation accelerated at its fastest pace since 1982 in November, the Labor Department said Friday, putting pressure on the economic recovery and raising the stakes for the Federal Reserve. The consumer price index, which measures the cost of a wide-ranging basket of goods and services, rose 0.8% for the month, good for a 6.8% pace on a year over year basis and the fastest rate since June 1982. 

A Starbucks store in Buffalo has become the first location in the country to unionize after employees voted by a margin of 19 to 8 to join the Workers United Union. Two other stores in the region also voted on Thursday, but one said no, while results at the third location weren't conclusive. Never in the coffee chain's 50-year history has it relied on union workers to serve up its lattes among its 9,000 corporate-run stores across the U.S.

Shares of Oracle are up more than 13% during trading this morning after the company reported earnings and revenue that beat analyst estimates. It’s set to add about $33 billion to its market cap, bringing it to about $275 billion. The company reported over $10 billion in revenue during the quarter.
 

The Big Four accounting firms have recorded their strongest financial performance since the collapse of Enron as corporate clients rushed to transform their businesses during the coronavirus pandemic. In aggregate, the leading pack, which includes Deloitte, EY and PwC, will have racked up $167.3bn in revenue for the financial year ended 2021, a 7 per cent increase. It is the strongest collective result since the Enron scandal led to the collapse of Arthur Andersen in 2002 and reduced the Big Five to the Big Four.

Weekly jobless claims reached tumbled last week, reaching a fresh 52-year low as the U.S. jobs market climbs out of its pandemic-era hole, the Labor Department reported Thursday. Initial filings for unemployment insurance totaled 184,000 for the week ended Dec. 4, the lowest going back to Sept. 6, 1969, which saw 182,000.

The Covid-19 pandemic last year drove the biggest increase in death benefits paid by U.S. life insurers since the 1918 influenza epidemic, an industry trade group said. Death-benefit payments rose 15.4% in 2020 to $90.43 billion, mostly due to the pandemic, according to the American Council of Life Insurers. Covid-19 also spurred the fastest rise in sales of insurance policies in 25 years

China's crackdown on its technology sector looks set to continue following nearly a year of unwieldy regulatory efforts. It all began in November 2020, when Jack Ma's Ant Group was forced to cancel what would have been the world's largest IPO. Regulatory efforts then turned to data security and protection - with large fines imposed on Alibaba and culminated in a NYSE delisting announcement last week by DiDi Global.  China is now said to be drawing up a blacklist that will make it harder for new technology companies to raise foreign funding and list overseas. The blacklist could be published as early as this month.

Coffee prices on futures markets have rallied to a 10-year high, with companies and traders dashing to lock in supplies as they contend with shipping bottlenecks and a late-year rise in demand. Traders are turning to futures, products that allow them to secure deliveries at a set price, on concerns they may be unable to obtain adequate stockpiles on the “physical market” where they can be more selective about the product they will receive.

Americans plan to spend with gusto this holiday season despite concerns about the economy and inflation and worries that supply bottlenecks might delay the arrival of their gifts.The CNBC All-America Economic Survey finds that individuals, on average, plan to spend $1,004 on gifts, up 13% from the pandemic-depressed number last year, and the highest number since 2018.
 

Stocks rallied to start to the week yesterday, with the Dow erasing its losses from last week, as investors shook off fears around the emerging threat of omicron.  Shares linked to the economic reopening gained the most yesterday, including energy, industrials and airlines.  Investors continued to sell tech stocks with relatively high valuations. 

A major shift is underway at the Federal Reserve to begin to remove the central bank’s massive pandemic easing policies and could see them hike rates sooner than is priced in by markets.  Comments by Fed officials suggest the central bank is likely to decide to double the pace of its taper to $30 billion a month at their December meeting next week. Initial discussions could also begin as soon as the December meeting about when to raise interest rates and by how much next year with Fed officials set to submit a fresh round of economic forecasts and projections for the fed funds rate.

Inflation in Europe last month was the highest it has been in over 30 years.  The eurozone saw inflation increase by 5% led higher by energy.  It will be interesting to see what the European Central Bank does at their next meeting knowing the Germans fear inflation the most.

Stocks were lower last week as investors digest the change in policy stance from the Federal reserve and a new strain of COVID.  The heavy selling in technology stocks extended to the crypto currency universe where prices also dropped.  Bitcoin dropped sharply over the weekend, trading below $50,000.

A measure of U.S. services industry activity unexpectedly rose in November, hitting a fresh record high as businesses boosted hiring, but there was little sign that supply constraints were easing and prices remained high.  The Institute for Supply Management said their non-manufacturing activity index increased to 69 last month, the highest reading since the series started in 1997.  This index is important because the services sector accounts for more than two-thirds of U.S. economic activity.

New orders for U.S.-made goods increased more than expected in October and businesses spending on equipment appeared to rebound after declining in the third quarter.  The Commerce Department said that factory orders increased 1.0% in October. Data for September was revised higher to show orders gaining 0.5% instead of 0.2% as previously reported.  Factory orders increased 17.1% on a year-on-year basis.    Manufacturing, which accounts for 12% of the economy, is being driven by still-strong demand for goods despite spending shifting back to services.
 

The U.S. economy created far fewer jobs than expected in November, in a sign that hiring started to slow even ahead of the new Covid threat.  Nonfarm payrolls increased by just 210,000 for the month, though the unemployment rate fell sharply to 4.2% from 4.6%, even though the labor force participation rate increased for the month to 62%%, its highest level since March 2020.

The Senate passed a short-term government funding bill last night, sending it to President Biden’s desk a day before a Friday deadline to prevent a shutdown.  The president is expected to sign the measure before the end of Friday and prevent a lapse in federal funding.

Oil prices dropped more than 4% before rebounding yesterday after OPEC+ announced they would continue their supply hike of 400,000 barrels per day per month, despite the threat of Omicron variant cases.

After pulling back on borrowing during much of the pandemic, Americans are ready to pile on the debt as they edge closer to their pre-pandemic spending ways.  27% of Americans said in October that they had applied for a credit card in the past 12 months, according to the Federal Reserve, which marks the highest level since 2019. 

The major stock averages fell sharply yesterday, giving up solid gains earlier in the day after the Centers for Disease Control and Prevention confirmed the first case of omicron in the U.S.

Companies added jobs at a robust pace in November despite worries about rising inflation and the threat that the pandemic could slow growth into the winter months, according to a report from the payroll processing firm ADP. Private hiring increased by 534,000 for the month, better than estimate of 506,000 in a labor market that appears to be getting tighter. Big business led job creation by company size, but it was hospitality and leisure that led in the sectors.

A closely followed index of U.S.-based manufacturers rose to 61.1% in November from 60.8% in the prior month, according to the Institute for Supply Management. Any number above 50% signifies growth. This is the 18th straight month in which the index has been above that level. Manufacturers — like most companies — are in an odd spot. They have plenty of demand from customers for new cars, appliances, and computers. Yet businesses can’t make enough products owing to a major shortages of labor and supplies.

Home-price appreciation occurred at a slower pace in September, according to a major price barometer, suggesting the market is cooling after over a year of frenzied sales.  The S&P Case-Shiller 20-city price index posted a 19.1% year-over-year gain in September, down from 19.6% the previous month. On a monthly basis, the index increased 0.8% between August and September.  Phoenix led the country in terms of home-price growth, with a 33.1% increase, followed by Tampa, Fla., and Miami.

U.S. consumer confidence dropped to a nine-month low in November amid worries about the rising cost of living and pandemic fatigue, but that did not change expectations for stronger economic growth this quarter.  The survey from the Conference Board showed consumers less enthusiastic about buying a house and big-ticket items such as motor vehicles and major household appliances over the next six months, likely because of shortages, which have boosted prices. Consumers held strong views of the labor market, with the gap between those saying jobs are plentiful versus hard to get widening to a record high.

Oregon Gov. Kate Brown announced Tuesday that the Legislature will hold a special session to address preventing evictions for renters.  She said she would propose extending eviction protections for those who have applied for rental assistance, ensuring landlords were paid in full for the rent they’re owed and providing up to $90 million in additional rental assistance to support low-income tenants through the winter.