- The Dow sped toward a weekly gain of more than (points.)
- A key U.S. housing market metric surged to its highest level since before the financial crisis.
- Recession hawks say the “next housing market crash” won’t involve mortgages at all.
The Dow capped a spectacular week with a final bounce on Friday, as U.S. homebuilding activity surged to its highest level since the housing market crash.
With Wall Street sentiment succumbing to “extreme greed” and more tax cuts potentially on the way, investors don’t appear worried that thegrowing asset bubbleis going to pop anytime soon.
Dow Burns Brighter as Stock Market Revels in ‘Extreme Greed’
The U.S. stock market raced to fresh all-time highs this week.
The Dow Jones Industrial Average rose in four of five sessions for a net gain of more than 591 points. The index now sits within striking distance of the historic 43, 06 milestone.
The S&P and Nasdaq also crossed important thresholds, clearing the 3, 321 and 9, (levels, respectively.)
According to
That greed has tapered over the past two weeks since peaking at (**********************************************************************************, but it still reads (on a scale of 0 to
U.S. Housing Market Metric Spikes to 13 -Year High
Stocks aren’t the only asset class burning bright. U.S. homebuilding activity surged to a 16 -year high last month, climbing to its highest level since before the financial crisis.
Housing starts rallied 30. 9% to a seasonally adjusted annual rate of 1. million units in December, easily surpassing economist estimates.
US housing starts spiked to their highest level since December (********************************************************************. | Source:Trading Economics
The housing market only. accounts for about 3.1% of the US economy, but the spike in housing starts is indicative of improving sentiment across the board.
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Finance professionals are similarly indifferent. ATD Bank surveyrevealed that 89% of respondents were either entirely unconcerned about a potential recession or did not believe one was a realistic threat.
Yet there are reasons to believe they should be more worried. According to Vanguard Chief Economist Joseph Davis, present stock market valuations anticipate that the US economy will secure 3% GDP growth in , which is far above the 1.5% to 2% growth that most professional forecasters expect.
Recession Hawks: Watch Auto Loans – Not the Housing Market
Analysts continue to scrutinize housing data for evidence of an inflection point, but recession hawks warn that the “next housing market crash” won’t involve mortgages at all.
U.S. households have accumulated astaggering $ trillion in debt. Doug Kass and David Rosenberg have both speculated that auto loans could be the pinthat pricks this catastrophic consumer debt bubble.
A record number of vehicle trade-ins were underwater on their loans in (****************************************************************, and Kass says that puts the US auto industry at risk of falling into a “tailspin in (******************************************************************. ”This could cause“ collateral damage to US consumer confidence and spending ”- putting even more pressure on the“linchpin” of the US economy.
Disclaimer: The opinions in this article do not represent investment or trading advice from CCN.com
This article was edited by (Sam Bourgi) .
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