Equities are continuing to extend gains this morning after climbing more than 1% yesterday. Before GDP revisions for the third quarter come out, the Dow looks to open 38 points higher at 10,380 and futures on the S&P 500 are up 4.25 points to 1,112.50.
In contrast, WTI Crude oil is down 34 cents to $73.38 per barrel as OPEC announced it would keep its production quotas steady, urging member countries to to be in compliance with the production cuts agreed upon last year.
Spot Gold is also trading down 60 cents to $1,092.80.
Key Events Today:
8:30 ― Gross Domestic Product for the third quarter is set to be revised down yet again, this time by one-tenth to +2.7% ― in the first estimate two months ago it was +3.5%. The culprits for the expected downgrade are inventory and construction data, while on the upside new data on consumer spending has been more positive than previously thought.
Economists at IHS note that markets are unlikely to follow the results too closely. “[T]he third quarter figures are ancient history at this point, and what matters more now is that fourth quarter growth is shaping up at around 4% as the inventory cycle turns upwards.”
10:00 ― While the GDP data is unlikely to shake markets, the Existing Home Sales could. No matter what the number is some analysts are bound to be surprised as estimates are all over the map. The “consensus” is for the annualized rate to jump from 6.10 million to 6.25 million, but predictions range from 5.20 million to 6.34 million.
Analysts from Nomura are on the pessimistic front: “We forecast existing home sales to decline sharply in November due to the initially scheduled expiration of the first-time homebuyer tax credit. Specifically, we look for a decline of about 15% to an annualized rate of 5.2 million units.”
In total contrast, economists at IHS are expecting “a last burst of sales in November,” based on the 3.7% uptick in October's Pending Home Sales Index. However, their broader outlook isn’t much different. “Given that the Mortgage Bankers Association's Purchases Index fell to its lowest level since 1997 during November, sales are likely to plunge in December, despite the extension and expansion of the tax credit.”
- Treasury Auctions:
- 11:30 ― 4-Week Bills