Fresh assurances from the US Federal Reserve that monetary plocy will remain accommodative as long as needed to help revive economic growth continued to bolster Wall Street to record highs last week.
The market is truly riding a strong bullish sentiment wave, even weak economic data did not seem to deter investor optimism.
For instance, monthly jobs report showed weaker than expected numbers with only 162K jobs being adding in July. However, overall unemployment rate dropped from 7.6% to 7.4% last month, the lowest in over four years.
For the week, DOW gained 0.6%, S&P 500 added 1.1%, and NASDAQ jumped 2.1%.
With earnings season winding down, the US equity market is likely to shift into a lower gear next week with more sideways action expected.
Following are Sentiment charts for S&P 500 (NYSE:SPY), DOW Jones, and NASDAQ (NASDAQ:QQQ).
Following is an economic overview for the week August 5 - August 9, 2013.
(All times EST)
Monday, August 05
10:00 — ISM Non-Manufacturing PMI:
Monthly update will refer to developments in the non-manufacturing sector for July 2013. For June, this index slipped to 52.2% vs. expectations for 54.3% — indicating the non-manufacturing is expanding, but at a slower rate.
Tuesday, August 06
04:30 — Great Britain Manufacturing Production:
This update will present the annual rate of GB's manufacturing production for June. In May 2013, the index fell by 0.8% (month to month).
08:30 — US Trade Balance:
In May, US trade deficit expanded to $45 billion vs. expectations for a deficit of $40 billion. A further increase in deficit may negatively affect commodities prices.
08:30 — Canada Trade Balance:
This report may affect the Canadian dollar which tends to be correlated with commodities prices. In May, exports slipped to 1.6% and imports decreased by 3.2%; as a result, deficit fell from $951 million in April to $303 million.
Wednesday, August 07
05:30 — Bank of England Inflation Report:
Bank of England will publish a quarterly report that includes the bank’s inflation projection for 2013 and 2014.
10:00 — Canada IVEY PMI:
This report will show the diffusion index based on surveyed purchasing managers for July 2013.
10:30 — Crude Oil Inventories:
EIA (Energy Information Administration) will publish its weekly report on US crude oil inventories for the week ending on August 2 2013.
Japan Monetary Policy Meeting and Press Conference (tentative):
BOJ members will decide on any shifts to the bank's current asset purchase program.
Thursday, August 08
China Trade Balance (tentative):
In June, China’s trade balance increased to a $27.1 billion surplus. A further increase would indicate that China's economic growth is improving and thus may positively affect commodities prices.
08:30 — US Unemployment Claims:
Weekly update will refer to developments in the initial jobless claims for the week ending on August 2, 2013. Last week jobless claims fell by 19k to reach 326k. This upcoming weekly report may affect the US dollar and consequently commodities and stocks markets.
21:30 — China CPI:
During May, Chinese inflation rate rose to an annual rate of 2.7%, lower than China's target inflation. The low inflation is another indication for China's economic slowdown. If inflation rate increases in the upcoming report, it may indicate China's economic progress is expected to improve.
Friday, August 09
08:30 — Canada Unemployment Rate:
The upcoming report might affect the Canadian dollar and consequently commodities. In June 2013, unemployment remained unchanged at 7.1%.
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.