From Rodrigo Serrano of Rational Capitalist Speculator ,
This objective report concisely summarizes important macro events over the past week. It is not geared to push an agenda. Impartiality is necessary to avoid costly psychological traps, which all investors are prone to, such as confirmation, conservatism, and endowment biases.
+ Existing home sales may have underperformed the consensus forecast, but for good reason. A lack of homes for sale  (supply), particularly at the low-value end, was the culprit. This development will help maintain upward momentum in home prices  throughout 2013. Moreover, New Home Sales may have printed a negative MoM growth-rate, but this was due to a huge upward revision in November  and doesn’t deter the bigger picture of continued growth for the sector in 2013. Overall, inventory levels remain very lean. Higher home prices will result in a positive wealth effect for consumers and help support consumption. Furthermore, low inventory levels will act as an incentive for homebuilders to hire, buttressing economic activity.
+ The U.S. job market is clearly on the mend from the looks of the jobless-claims data . At roughly 352K, the 4-week average is now at its lowest level in almost 5 years. This development is a harbinger for a solid January payrolls report, due in a week from today.
+ The bears’ strongest point, a stalling manufacturing sector, isn’t confirmed at all by Markit’s latest preliminary PMI reading . For January, the overall index rose from 54 to 56.1, a 10-month high. Furthermore leading indicators in the report, such as New Orders, point to further expansion in the months ahead.
+ The world’s largest economic bloc, the European Union, is clearly stabilizing. Germany’s manufacturing PMI rises to the highest in almost a year , while consumer confidence  in the European region expands for the second month in a row. Both reports are for January. Meanwhile, the ZEW Center for European Economic Research reports that investor confidence in Germany skyrocketed 24.6 pts , hitting a level not seen in more than 2.5 years (same story  for Euro-area confidence). Finally on the financial front, investors are giving the thumbs up at recent reforms in Spain  and Portugal ; both countries issue bonds to strong demand —- meanwhile, many banks that participated in the LTRO at the zenith of the crisis, are now repaying their loans quicker than expected , a sign of confidence that the worse is over.
+ China continues to surprise to the upside. The country’s manufacturing PMI, released by HSBC, hits a 2-year high  in January. Furthermore, Copper  is about to break out of its multi-year triangle to the upside (see 3-yr view).
+ The Conference Board’s U.S. leading indicator points to strengthening economic growth  in the months ahead, rising 0.5% in December. “Housing, which has long been a drag, has turned into a positive for growth and will help improve consumer balance sheets and strengthen consumption,” says Conference Board economist Kenneth Goldstein.
- Manufacturing has stalled and is looking to contract soon, as the Federal Reserve Bank of Richmond reports that its manufacturing index slumped to a 6-month low  in January. This report follows news of weakness in the sector from the New York and Philly Federal Reserve Banks. Housing, which now only accounts for only 3% of U.S. GDP economy will not be able to pick up the slack (manufacturing accounts for 12% according to the National Association of Manufacturers )…
- …furthermore consumption, which accounts for roughly 70% of the economy is set to shift down a gear as consumers hunker down as they face an expiring 2-year payroll tax holiday . Bloomberg’s Consumer Comfort, which confirms recent falls in the University of Michigan  and Conference Board  consumer confidence surveys, falls to a 3-month low .
- Complacency reigns in Euroland as Draghi states that the darkest times have passed . Are we really out of the woods? Investors are ignoring worrisome developments. Spanish unemployment hits a record high  while stories of corruption within the country’s government swirl about , creating political uncertainty at the flashpoint of the debt crisis. Meanwhile in France, Europe’s second largest economy, recession is knocking on the door  and could result in another flashpoint.
- From a technical perspective, stocks are very overbought at these levels . Now is not the time to make risk-on bets as the S&P 500 also approaches multi-year resistance and many macro risks remain lurking in the background.
—(Source Bespoke Investment Group )
- Common sense says that constant intervention and warping of financial markets by central banks will inevitably come back to haunt investors and the global economy. Warnings grow of a credit bubble  as rampant central bank intervention has masked the true cost of money. The subsequent adjustment will undoubtably be painful.