Macro Briefing: 15 December 2023

* Six rate cuts expected for 2024, predicts Morningstar economist
* China industrial output and retail sales rose in November, but…
* China economic activity still appears to be slowing
* Eurozone business activity contracts at faster rate in December
* AI is threat to financial system, US regulators warn
* US jobless claims drop to 8-week low, suggesting labor market remains strong
* US retail sales rebound in November, beating expectations:

Homebuilder stocks surge as Federal Reserve forecasts rate cuts for 2024, which would bring relief to this battered industry. But the possibility for further disruption in the market can’t be ruled out, advises an analyst. “If rates come down too much — and mortgage rates follow — we’ll see the current supply-demand imbalance exacerbated as pent-up demand gets released into an undersupplied market, putting upward pressure on home values – and inflation,” predicts Jack Macdowell, chief investment officer at Palisades Group.

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