The Dow Jones Industrial Average enters the week on a seven week winning streak that's getting harder and harder to hold together as valuations become more elevated. This is why gains have been uneven across the board. One area of justification for the rally has been signs of an economic upswing that began in late summer and has gotten exponentially stronger.
The latest sign is in housing where new home sales rebounded, surging past expectations and prices (both median and average). It's still clearly a bifurcated market, not only based on regions, but within regions based on prices. The McMansions are back but lower end housing still struggles.
Still, housing data is very important, underscoring need for swift action on Dodd-Frank especially the ability to pay clause which had killed home ownership dreams for many.
Perhaps the best news this week came late Friday when the CEO of Lockheed Martin cried "uncle" saying she heard President-elect Trump loud and clear and costs will come down on the F-35.
On this holiday shortened week look for low volume to skew the message of the market but the bias should remain to the upside. As for Dow 20,000, the key is a rebound in bank stocks which saw year end selling from ETF adjustments.
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