Morning Economic News - December 24, 2008

Commentary and Overnight Trading

Tuesday the stock market shrugged off a megadose of bad news that would have easily made for a 500 point drop in the Dow in September or October with a relatively small 1% drop. Both major housing sales indicators fell significantly in November. Part of the reason may be just how far the market has already fallen and that's reflected in another number that came out Tuesday: The State Street Investor Confidence Index. The Index, which measures the ratio of institutional investments in equity versus (theoretically less risky) debt securities fell by 1/3, indicating a huge shift out of stocks over the last month.

Markets trading overnight seem little thrilled or scared by the days news either, with US stock market futures up two-tenths of a percent, oil down 0.15% and Asian stock markets mixed with the biggest move a 2.37% drop in the Nikkei. The dollar is down against the yen, euro, pound and Canadian dollar. [3:14 AM EAstern]

Tuesday's Economic News

State Street Investor Confidence Index - December 2008

• Global Index: 48.0


• Monthly Change: Down 6.5


• Year-to-year Change: Down 17.9


• North America Index: 30.1


• Monthly Change: Down 15.2

Existing Home Sales - November 2008

• Total Existing Home Sales Annual Rate: 4.49 million


• Monthly Change: Down 8.6%


• Year-to-year Change: Down 10.6%

New Home Sales - November 2008

• Annual Sales Rate (Seasonally Adjusted): 407,000


• Monthly Change: Down 2.9%


• Annual Change: Down 35.3%

German Leading Index Down 2.6%

• Leading Index: Up 0.1%


• Coincident Index: Up 0.3%

What I'm Reading

Recession Compounds Housing Woes

A deepening recession and tight credit conditions are
compounding problems in the housing market, suggesting that declines in
home prices may continue well into 2009.

Japan Manufacturers' Confidence Slumps as Recession Deepens, Survey Shows Confidence among Japanese
manufacturers fell the most on record as exports collapsed,
signaling the recession will extend into 2009.

Thailand to Lift Spending as Government Predicts First Recession in Decade Thailand’s new government plans to
increase spending and tax breaks to stimulate domestic demand as
it forecast the economy will slip into its first recession in
almost a decade.

Philippine Imports Fall for First Time in 17 Months on Electronics Orders Philippine imports fell for the
first time in 17 months as demand waned for raw materials used
by electronics exporters amid a global recession.

U.S. Housing Prices Collapse at Near-Depression Pace After Purchases Slide Sales of single-family houses in the
U.S. dropped in November by the most in two decades and resale
prices collapsed at a pace reminiscent of the Great Depression,
dashing speculation the market was close to a bottom.

U.S. Economy Contracted 0.5% in Third Quarter as Recession Began to Deepen The U.S. economy shrank in the third
quarter at a 0.5 percent annual pace as the now year-old
recession intensified.

U.K. Economy Shrank Most Since 1990 in Third Quarter, Exceeding Estimates The U.K. economy shrank the most
since 1990 in the third quarter and mortgage lending dropped to
the lowest in 14 years as tightening credit exacerbated the
slide into recession.

China Stocks Lure BlackRock With `Mother' of Stimulus Plans as Mobius Buys The biggest investors in emerging
markets say China is the best choice for 2009, betting plans to
stimulate growth will lead a stock market recovery in the fastest
growing major economy.

Australian Funding Costs Decline for a Fourth Day on Central Bank Actions Australian funding costs fell for a
fourth day on speculation central banks worldwide will add to
cuts in borrowing costs that led to near-zero interest rates in
the U.S. and Japan.

Philippine Peso, Stocks Drop in Year on Signs Global Slump Hurting Exports The Philippine peso headed for its
worst year since 2000 and stocks had their biggest annual loss
in at least two decades on signs the global slowdown is hurting
sales of the nation’s exports.

US, UK housing slump deepens; Japan boosts spending