Last week was a fairly typical Christmas holiday-split week, marked by weak volume before and after the day off, and a slight gain on par with the beginning of an average Santa Claus rally (not to mention the tepid bullishness in front of the Christmas break).  Though the trend was up more or less, take last week's price action with a grain of salt, as last week was anything but a normal one.

Let's first examine – and chart – last week's big economic news. 

Economic Data

The holiday-abbreviated trading week was still chock-full of economic information, much of which we do need to mention and chart for you (just for some added perspective).  And for what it's worth, though the strong GDP figure for Q3 overshadowed most everything else, there were a couple of red flags to keep in mind.

One of those red flags was on the home sales front.  The pace of existing home sales slumped from 5.25 million to 4.93 million in November, while the pace of new home sales fell from 445,000 to 438,000.  At this point it's difficult to deny we're seeing stagnation here.

New and Existing Home Sales Chart

Source: Thomson Reuters Eikon

Durable goods orders slipped, rather than grew as expected.  Overall orders fell 0.7% in November, and fell 0.4% when taking transportation orders out of the equation.  We can't quite say the durable orders uptrend is weakening [the month-to-month volatility is normal, and even predictable].  But, it's certainly not accelerating. 

Durable Orders Chart

Source: Thomson Reuters Eikon

And of course, Q3's final reading on GDP growth was even better than first anticipated.  The economy grew at an annualized pace of 5.0%.  That was the highest reading since the first quarter of 2006, and it was on the way down then.  This time, it's clearly on the way up.  This bodes well for the long-term market trend.