Dow's New High Should Be Confirmed By Transports In Early 2024

Real GDP is now estimated to be up 2.7% (saar) during Q4, according to the Atlanta Fed's GDPNow tracking model. The estimate was raised from 2.6% following the release of today's housing starts report for November. Residential starts increased 14.8% last month to 1.56 million (saar), the highest in six months. Single-family starts jumped 18.0%, while starts of multifamily projects increased 6.9% (chart).

Housing's hard landing is probably over now that mortgage rates have tumbled by more than 100bps since early November (chart). The rolling recession in the industry is turning into a rolling recover. That obviously increases the odds that the economy-wide Godot recession will be a no-show in 2024, as it was in 2022 and 2023. So stock prices rallied again today.

The DJIA broke out to a new record high last Wednesday (chart). The DJTA remains 5.5% below its record high on November 2, 2021. We expect that it will also be in record high territory early next year. That's because we expect the rolling recession among goods providers to turn into a rolling recovery in 2024.