Markets were heading higher on Monday after existing home sales slipped in November. The National Association of Realtors announced that home sales hit a six-month low last month following two back-to-back months of gains. Sales fell 6.1% to an annual rate of 4.93 million units in November. Despite the large tumble last month, analysts are suggesting that this is not signaling trend. However, it is partially attributed to shrinking inventories, which also hit an 8-month low level last month. Existing home sales are up 2.1% over this time last year. Brian Jones, a senior U.S. economist at Societe Generale, said, “The recovery in housing remains slow. I don’t think it’s really an indication that there’s a fundamental weakening in the housing market.”
General Motors (GM) share prices were on the rise over 1% as news was released the company’s ignition switch claims continued to rise. Throughout the previous week, the company received an additional 104 claims, bringing the grand total to 2,430. The total number of claims for deaths now sit at 260; there are 172 for catastrophic injury claims and 1,998 for less-serious injuries that still required hospitalization. They have approved a total of 42 death claims related to the ignition switch recall. GM has set up a fund of $400 million to compensate those whose claims are approved by the company. However, they said it could rise as much as $600 million.
Gas prices have now hit their lowest level in five-and-a-half years last week. According the AAA’s Fuel Gauge Report, the national gas prices have dropped a record 88-days in a row. The decline over the past week was 15 cents per gallon, the largest drop in over six years. Throughout the U.S. gas is now under $3.00 per gallon, with the exception of Hawaii and Alaska. The average price for regular-grade unleaded gasoline is now at $2.47 per gallon. It is projected that gas prices could tumble as much as a $0.14 by New Year’s. Lundberg’s publisher, Trilby Lundberg, said, “This is mostly driven by crude oil prices, and absent a sudden spike we very well may see a drop of a few pennies more. That said, demand is up at these low prices.”
That’s all for today,
Warren Gates, Normandy Research