"The Easy Button"

Some Fridays, it’s easier to write this column than others, and this is one of those Fridays. The New Year is getting underway with some economic momentum from December when Congress passed the $858 billion stimulus package (cleverly disguised as tax cuts) and better-than-expected holiday retail sales.

  • The manufacturing sector has moved beyond the inventory correction cycle – the bounce when manufacturers, wholesalers and retailers all restock at the same time from very low, recession-induced levels. There is sustained growth thanks to exports, business investment and moderate increases in consumer spending. The new orders component of the ISM manufacturing index hit a robust 60.9 in December, well above the break-even level of 50. Manufacturers such as Parker Hannifin, Johnson Controls and Rockwell Collins have reported strong quarterly earnings.
  • The beleaguered housing market ended last year on a hopeful note as existing home sales rose 12 percent in December to an annualized rate of 5.28 million, although foreclosures continue to weigh down prices.
  • The Conference Board’s index of leading indicators rose a solid1 percent in December, the sixth consecutive monthly increase and a sign that economic momentum is building.
  • Jobless claims continue trending lower in fits and starts, falling to 404,000 for the week ending January 15th. The indicator looks set to move below the elusive 400,000 mark – which it did during the week of December 25th – and continue lower from there.
  • I’ve saved the best for last – the 146 percent increase in the volume of capital investing in commercial real estate last year, according to Real Capital Analytics. Forecasts at the beginning of 2010 were for increases in the range of 20 to 30 percent. The level remains historically low, but that means the market has ample room to rack up further gains this year, building on last year’s momentum.