This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Charles Schwab: Housing Recovery To Boost Economy

By STEVE ROTHWELL

The housing market is recovering from its collapse to such an extent that it will be one of the key drivers of the economy next year, and could add as much as 1 percentage point to growth, says Liz Ann Sonders, chief investment strategist at Charles Schwab & Co. Inc.

A recovery in U.S. manufacturing, supported by better demand from emerging markets and improved consumer spending, will also contribute to growth. Those factors will be enough to counter the headwind of declining government spending.

There are several positives heading toward 2013. Confidence among U.S. homebuilders last month rose to its highest level in six and a half years. That's important because the housing sentiment index typically leads changes in the unemployment rate by about 15 months, Schwab estimates.

Also, stock valuations are reasonable, says Sonders. That, combined with the improving economy, should support stock markets next year.

Here are some excerpts from an interview with Sonders:

Q: What are the main themes investors should keep an eye on in 2013?

A: The economy has a couple of very important pockets of strength heading into the New Year. Housing is probably dominant among them, which I think really starts to feed into job growth and continues to feed into consumer confidence. Domestic energy obviously is a big story. The renewed competitiveness of U.S. manufacturing is a big story. So, all of those, I think start to support the economy and serve as pretty decent offsets to whatever the hit is from the "fiscal cliff."

Housing will be a bigger driver of improvement in the labor market in 2013 than has been the case. It's really just starting to kick in from a jobs perspective. The biggest job gains during the last up-cycle came from the housing bubble, in everything from construction to related industries, and that's starting to kick in again.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs