LIVE MARKETS-Home is where the heart is, factories are where the heartache is

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

HOME IS WHERE THE HEART IS, FACTORIES ARE WHERE THE HEARTACHE IS

Investors were greeted on the second-to-last trading day of the year by two mixed economic indicators

Signed contracts for the sales of previously owned U.S. homes USNAR=ECI increased by 2.2% last month, according to the National Association of Realtors (NAR), breezing past the 0.9% increase analysts anticipated.

With this, the pending home sales index touched its highest level since February 2023.

The upside surprise was largely attributable to a 5.2% jump in pending home sales in the south, as the region recovers from a spate of destructive hurricanes.

This, despite persistently elevated mortgage rates.

"Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory," writes Lawrence Yun, NAR's chief economist. "Buyers are no longer waiting for or expecting mortgage rates to fall substantially."

"Furthermore, buyers are in a better position to negotiate as the market shifts away from a seller’s market," Yun adds.

It should be noted that despite last month's increase, the pending home sales index is still hovering near its nadir in the wake of mandated COVID shutdowns, and the average 30-year fixed contract rate has been bouncing between 6% and 8% for over two years.

Pending home sales, along with building permits and purchase loan applications, are considered among the more forward-looking housing indicators, as signed contracts typically translate into actual sales a month or two down the road.

Switching gears, the contraction of activity at midwest factories unexpectedly deepened this month.

The Chicago purchasing managers' index (PMI) USCPMI=ECI shed 3.3 points to settle at 36.9, the lowest level since May.

A PMI reading south of 50 indicates monthly contraction. A number weaker than 43 is often associated with recession.

The Chicago PMI is a more volatile series than the Institute for Supply Management's (ISM) national PMI number expected this Friday.

That report is expected to show National Factory activity continues to drift just below that magic level of fifty, as goods makers contend with still-high interest rates, and a spate of unknowns related to the incoming Trump administrations policies as they pertain to tariffs, taxes and other issues.

(Stephen Culp)

FOR MONDAY'S EARLIER LIVE MARKETS POSTS:

COLD BLAST - CLICK HERE

DOWN THE STRETCH, GROWTH IS MAKING A RUN FOR THE ROSES - CLICK HERE

ELECTIONS, RATE CUTS AND ECONOMIC DIVERGENCE: A LOOK BACK AT 2024 - CLICK HERE

WILL THE WHITE HOUSE IMPOSE A UNIVERSAL TARIFF? - CLICK HERE

STOXX SUBDUED, TECH AND HEALTHCARE WEIGH - CLICK HERE

EUROPE BEFORE THE BELL: SET TO FALL ON FINAL FULL TRADING DAY OF 2024 - CLICK HERE