“If most traders would learn to sit on their hands 50 percent of the time, they would make a lot more money.” — Bill Lipschutz

1. US Pending-Home Sales Plunge by Most Since Start of Pandemic — An index of contract signings decreased 9.3% to 71.8 last month, according to data released Wednesday by the National Association of Realtors. The decline was regionally broad and well below the lowest estimate in a Bloomberg survey of economists. Housing activity typically slows in winter
months and picks up more in the spring selling season. While NAR adjusts the data for these patterns, the drop was still the largest for any December in data back to 2001.
2. US Economy Expanded at Revised 4.4% Pace in Third Quarter — Inflation-adjusted gross domestic product, which measures the value of goods and services produced in the US, increased at a revised 4.4% annualized rate, the fastest in two years, according to Bureau of Economic Analysis data out. The report showed one of the strongest back-to-back quarters for growth since 2021, when the economy was still recovering from the pandemic. Companies dialed back the tempo of goods imports after an early-year rush to beat President Donald Trump’s sweeping tariffs. Consumer and business spending have also held up well despite erratic trade policies.
3. PCE Inflation Meets Expectations. Fed Is Likely to Hold Rates Next Week — The core personal consumption expenditures price index, which excludes food and energy, rose 0.2% in November from the previous month and 2.8% from a year earlier, the Bureau of Economic Analysis reported Thursday. Those figures match FactSet estimates for a 0.2% monthly increase and a 2.8% annual gain. Headline PCE increased 0.2% on the month and 2.8% year over year, compared with expectations for a 0.2% monthly rise and a 2.8% annual increase. Because the data were delayed by the record-long government shutdown, the numbers reflect conditions from November, already several months old. While PCE is the Fed’s go-to inflation metric, the age of the report means officials are likely to place less weight on this reading than they would under normal circumstances.

The week ahead — Economic data from Econoday.com:

“I’m not better than the next trader, just quicker at admitting my mistakes and moving on to the next opportunity.” — George Soros

1. US Core CPI Rises 0.2%, Bucking Estimates for Bigger Rebound — The core consumer price index, excluding the often volatile food and energy categories, increased 0.2% from November, according to Bureau of Labor Statistics data out Tuesday. On an annual basis, it advanced 2.6%, matching a four-year low. Economists said that data was artificially depressed by the record-long government shutdown because the BLS couldn’t collect prices in October and assumed no increases in key housing metrics. November data were also collected later than usual and could have been affected by holiday discounts. Several categories showed price declines, including appliances and used cars and trucks. Vehicle repair costs fell by the most on record. Core goods prices, which exclude food and energy, stagnated last month — also defying expectations for a rebound.
2. Germany Leads Military Mission in Greenland in Response to Trump — Germany will take the lead of European nations sending military personnel to Greenland after Denmark said its meeting with top US officials intent on controlling the world’s biggest island revealed that a “fundamental disagreement” remains. France will participate in the joint drills in Greenland this week, according to the defense ministry’s press office, which provided no details. In addition, Sweden is sending “several officers,” Norway two persons and the UK one officer. The reconnaissance group is visiting the island ahead of the planned “Arctic Endurance” training exercise, UK Defense Minister John Healey told reporters in Sweden. Denmark on Wednesday said the drill with North Atlantic Treaty Organization allies would become a permanent fixture.
3. Trump Threatens Insurrection Act as Minnesota Protests Grow — The 1807 law allows the president to use regular military troops on US soil for domestic law enforcement. It was last invoked during the 1992 riots in Los Angeles. Trump’s ultimatum could further fray tensions in Minneapolis, where on Wednesday a federal officer shot a man in the leg. The incident occurred one week after the fatal shooting of a local woman who was a US citizen by an ICE agent, which touched off the demonstrations.
4. Trump to Hit European Nations With 10% Tariffs as He Presses for Sale of Greenland — The president, in a social-media post on Saturday, said the 10% tariffs would go into effect on Feb. 1 and would apply to all goods sent to the U.S. from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland. The tariffs will increase to 25% on June 1 and remain in place until a deal is reached for what he called the “complete and total purchase” of Greenland, Trump said. The president has said it is necessary for the U.S. to take control of Greenland to counter China and Russia. In his social-media post, he said the U.S. is “immediately open to negotiation” with Denmark and the other European countries, casting the tariff threat as leverage to secure the Arctic territory. Greenland Prime Minister Jens-Frederik Nielsen said recently that his constituents don’t want the island to be owned or controlled by the U.S.

The week ahead — Economic data from Econoday.com:

1. US Job Openings Decline to Lowest Level in More Than a Year — The number of available positions decreased to 7.15 million in November from a downwardly revised 7.45 million in the prior month, Bureau of Labor Statistics data showed Wednesday. The figure was below all estimates in a Bloomberg survey of economists. The pullback in openings reflected fewer opportunities in leisure and hospitality, health care and social assistance, as well as transportation and warehousing. The number of hires declined to the lowest since mid-2024, while layoffs also eased. The number of layoffs in November declined to a six-month low after climbing in the prior month to the highest level since 2023, the JOLTS report showed. At the same time, there was a pickup in the number of Americans who voluntarily left their jobs in industries including accommodation and food services, as well as construction
2. US Trade Gap Shrinks to Smallest Since 2009 on Imports Drop — The goods and services trade gap shrank 39% from the prior month to $29.4 billion, Commerce Department data showed Thursday. The deficit was smaller than all estimates in a Bloomberg survey of economists. The report was delayed for over a month because of the federal government shutdown. Imports decreased 3.2%, reflecting declines in inbound shipments of medication and nonmonetary gold. Imports of pharmaceutical preparations dropped to the lowest since July 2022. The value of all US goods and services exports rose 2.6% in October. The figures aren’t adjusted for inflation. Companies frontloaded imports of drugs in September, likely in anticipation of President Donald Trump announcing what would be a 100% tariff on pharmaceutical imports to start Oct. 1, which ended up being delayed. Many companies were able to avoid the duty by striking deals with the administration in exchange for promises to lower drug prices.
3. US Payrolls Rise a Below-Forecast 50,000, Unemployment Lower — Nonfarm payrolls increased 50,000 last month after downward revisions to the prior two months, according to Bureau of Labor Statistics data out Friday. The unemployment rate edged down to 4.4%, settling back after the record-long government shutdown. The gradual cooling in the US labor market prompted the Federal Reserve to cut interest rates three straight times to close out 2025. While it was one of the weakest years for hiring since 2009, employers have also largely refrained from layoffs. The December data also suggest the labor market remained fragile at the end of the year, and the outlook for hiring is guarded. Economists see another year of limited job opportunities and cooling pay gains, likely exacerbating voters’ affordability concerns going into this year’s midterm elections.
4. SSupreme Court Sets Wednesday for Next Opinions Amid Tariff Watch — The US Supreme Court said Wednesday will be its next opinion day after leaving the market in suspense Friday on the fate of President Donald Trump’s tariffs, his signature economic policy. Arguments on Nov. 5 suggested the court was skeptical that Trump had authority to impose the tariffs under a 1977 law that gives the president special powers during emergency situations. A ruling against Trump on tariffs would undercut his signature economy policy and deliver his biggest legal defeat since returning to the White House. At issue are Trump’s April 2 “Liberation Day” tariffs, which placed levies of 10-50% on most imports, along with duties imposed on Canada, Mexico and China in the name of addressing fentanyl trafficking.

The week ahead — Economic data from Econoday.com: