Thursday is to be the most significant scheduled news day before the New Year. U.S. Unemployment Claims, Consumer Confidence, and New Home Sales will all be announced Thursday morning.
U.S. Unemployment Claims
The significance of unemployment claims Thursday goes far beyond it being the last release of the year. As we have seen in recent months, the unemployment rate is lowering. Tomorrow’s claims could confirm a continuation in the believe that employment is improving. It is important to realize the looming Fiscal Cliff could easily drown any bullish sentiment concerning employment in the United States.
Consumer Confidence is expected to decline Thursday to 70.3 after reaching 73.7. 73.7 was the highest confidence level since 2008. In result of tax increases and spending cuts, confidence could see a major drop in the first quarter of 2013.
New Home Sales
Building permits have increased consistently all year long peaking at a 4-year high recently.
New Home Sales on the other hand, have not been as bullish. They have been fairly consistently throughout the year and appear to be gaining momentum.
Economists expect a jump to 382K Thursday.
With the implementation of QE3 in September and the recently announced additional buying of $45 Billion per month of treasury security purchases, some analysts have expectations of a housing market rally in the near future.
As December comes to an end, let’s be careful trading the U.S. Dollar. In 2008′s financial crises, the Dollar soared in result of Risk Aversion. 2013 could be a similar scenario but with recent dollar sentiment, it is very hard to say.
Whether or not Europe’s recent bullish outlook will draw more funds away from the Dollar is in question.
Any long-term trades should be considered in the light of the fiscal cliff.
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