The Week Ahead: US Pending Home Sales and Canada Manufacturing PMI

Following last week's steep decline on Wall Street, the upcoming holiday-shortened week offers limited economic data for market participants to analyze.

The sell-off disrupted the typical Santa Claus rally, a seasonal trend where stocks tend to rise during the last five trading days of December and the first two of January.

Key updates for the week include U.S. pending home sales, scheduled for release on Monday, December 30. Markets will be closed on Wednesday, January 1, New Year's holiday.

On Thursday, January 2, reports on U.S. initial jobless claims, construction spending, and S&P Global Canada Manufacturing PMI will be released.

The week concludes on Friday, January 3, with the December ISM manufacturing report.

Additionally, Canadian investors should note that the Canada Revenue Agency (CRA) has announced an increase in the Tax-Free Savings Account (TFSA) contribution limit. Starting January 1, 2025, Canadians can contribute an extra $7,000 to their TFSA.

BNN Bloomberg reports that this increase aligns with the 2024 limit, which itself was an increase from $6,500 in 2023 and $6,000 in the three years prior. This additional room for contributions is adjusted according to inflation.

Canadians who have fully utilized their TFSA contribution limit by the end of 2024 will be eligible to contribute an additional $7,000 in 2025.

For those who have not maximized their contributions, the TFSA program permits the carry-forward of unused contribution room, beginning from 2009—the year the program was launched—or from the year they turned 18, whichever came later.

With the increase set for 2025, the total contribution capacity for someone who has never contributed and was eligible from the program's start will increase to $102,000, up from $95,000 in 2024.

Source: Trading Economics, TradingView