The turmoil in the markets last week was in reaction to the prospect of higher interest rates, exacerbated by confirmation that the Fed would scale back on its bond buying if the economy continued to improve.
For the week, DOW fell 1.8%, S&P 500 tumbled 2.11%, and NASDAQ declined 1.94%.
Homebuilding stocks bore the brunt of the sell-off despite positive data on housing due to increased speculation that rising mortgage rates would threaten to put a damper on the nascent real estate recovery.
The tumble of equity markets coincided with a fall in major commodities prices including gold, silver, oil and natural gas. Treasuries were not safe from the carnage, either. Yields on the 10-year benchmark government bond climbed 40 basis points to 2.53 %.
The stock market begins the last week of June still rattled by the US Federal Reserve's plans for reducing its stimulus efforts. This week could bring big intraday swings and volatility as asset managers reevaluate their portfolios to adjust to the new regime of diminishing support from the Fed.
Following are Sentiment charts for S&P 500 (NYSE:SPY), DOW Jones, and NASDAQ (NASDAQ:QQQ).
Following is an economic overview for the week June 24 - June 28, 2013.
(All times EST)
Tuesday, June 25
04:30 — Inflation Report Hearings:
Bank of England Governor will testify regarding economic progress and inflation developments in UK.
10:00 — CB Consumer Confidence:
In April, US consumer confidence index rose to 76.2 (month over month). Current expectations are that the April index will continue to increase which may positively affect commodities prices including oil and natural gas.
10:00 — New Home Sales (May 2013):
In April, new home sales increased to an annual rate of 454,000 — 8.8% gain (month over month). An increase in home sales for May will be a further indication of recovery in US real estate market, which may positively affect the US dollar.
Wednesday, June 26
08:30 — Final GDP (q/q):
This will be the third and final estimate of US’s Q1 2013 real GDP growth. A sharp change in growth rate from second to the third Q1 estimate is likely to impact the US dollar and commodities prices.
Thursday, June 27
04:30 — GB Current account:
This quarterly report will show changes in the gap between imports and exports as of Q1 2013. Based on the last report, UK trade deficit stood at £14 billion.
08:30 — US Unemployment Claims:
Weekly update will refer to changes in initial jobless claims for the week ending June 21. In the last report jobless claims increased by 18K to reach 354k. This upcoming weekly report may affect the US dollar and consequently commodities and stocks markets.
10:00 — US Pending Home Sales:
This report will be an indicator for changes in US housing market. If housing data shows increase in sales, it may pull up the US dollar.
10:30 — EIA US Natural Gas Storage:
EIA weekly report will refer to changes in natural gas production, storage, consumption and prices as of June 21. Last week, natural gas storage rose by 91 billion cubic feet to 2,438 billion cubic feet.
Friday, June 28
08:30 — Canada GDP (m/m):
In March 2013, Canada Real GDP increased by 0.2%. This monthly report will show developments in major industrial sectors for April 2013, which may affect the Canadian dollar and major commodities prices.
This commentary is for informational purposes only and does not constitute investment advice. The opinions offered herein are not recommendations to buy, sell or hold securities. Market IQ expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.