After closing at a new record high on Thursday, stock indexes declined fractionally today, as Congress struggled to meet a weekend deadline to write a law that would provide about $900 billion in additional federal relief to individuals and businesses suffering financially amid the deepening public health catastrophe.

The news has been grim. Daily death and hospitalization rates tragically broke records recently and millions of families are in financial jeopardy.  At the same time, however, the broad economy is doing fine, and stocks have been breaking records due to a shift in the asset valuation paradigm, as the relative value of bonds has declined versus stocks.

The latest evidence of economic strength came in the Census Bureau’s November retail sales data release, which declined -1.1% from October. That was well below the fractional gain of one-tenth of 1% that had been expected by Wall Street. However, it was much higher than a year ago. Despite Covid, retails sales for the 12 months through November were 6.2% higher than 12 months ago.

Housing starts rose yet again, to 1.547 million in November versus 1.528 million in October. It beat the 1.530 million expected by experts. Housing starts have remained well below the projected rate of 1.6 to 1.8 million that is consistent with long-term demographics and the replacement of the existing housing stock, according to estimates by academic experts in housing economics.

The Leading Economic Indicators, a forward-looking index of 10 key benchmarks of U.S. economic strength, rose six-tenths of 1% in November. This followed a rise of seven-tenths of 1% in both October and September.  LEI growth has been decelerating since the initial Covid outbreak in the U.S. Despite the Covid crisis, the LEI is not far from its pre-pandemic high.

The Standard & Poor's 500 stock index closed Friday at 3,709.41. The index lost -0.35% from Thursday, and was +1.24% higher than last Friday’s closing price. The S&P 500 has appreciated +49.5% from the March 23rd bear market low, and closed on a new all-time high on Thursday. 

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