Week in Review 1.24.2020

Leading Economic Index–The Conference Board’s Leading Economic Index (LEI) fell -0.3% in December, down in four of the past five months, and by the most since January 2016. Three of the ten LEI components made negative contributions (jobless claims, ISM new orders, and building permits). But jobless claims have already come down this month, high builder confidence suggests permits should improve, and the phase-one trade deal with China is expected to boost factory orders in the coming months. For these reasons, economists expect the LEI to stabilize in the near-term. On a y/y basis, the LEI was up just 0.1%, the least since November 2009. These indicators suggest that growth momentum has subsided in 2H 2019.Existing Home Sales rebounded 3.6% in December, the most in ten months, to a 5.54 million unit annual rate, the highest level since February 2018. The consensus was for a 1.5% gain to a 5.43 million unit rate. Sales were up 10.8% y/y, the fastest pace since November 2016. For the full year, existing home sales were 5.43 million units, unchanged from 2018. But households are well positioned to drive up sales in 2020, amid low unemployment, solid job and wage growth, and more household formations.

Goldman Sachs, the largest underwriter of initial public offerings (IPOs) in the U.S., announced that it will no longer take companies public in the U.S. or Europe if the board lacks either a female, or diverse director. In 2021, Goldman intends to raise the threshold to two diverse directors.