Global markets rallied last week after the Federal Reserve surprised investors by maintaining status quo on bond buys and holding off on a highly anticipated 'tapering' of stimulus for the time being. Market participants now expect tightening of Fed stimulus in December and thus there is expected to less nervousness for the next two months. However, given the already huge rally this year, further gains would be hard to come.
The next big hurdle markets are expected to face is the statutory debt ceiling, which is expected to hit around mid-October. With action to prevent a possible US government shutdown and debt default required from both the US Senate and the House of Representatives, a neck and neck battle through next weekend is almost inevitable.
Following are Sentiment charts for S&P 500 (NYSE:SPY), DOW Jones, and NASDAQ (NASDAQ:QQQ).
Following is an economic overview for the week September 23 - September 27, 2013.
(All times EST)
Monday, September 23
China Manufacturing PMI:
China Manufacturing PMI rose to a six-month high in September, signaling strength in Chinese manufacturing activity — Preliminary reading came in at 51.2 vs. expectations of 50.9.
04:00 — Euro zone Flash Manufacturing PMI:
Manufacturing activity in the Euro zone expanded at a slower rate than expected in September — Preliminary PMI fell to a seasonally adjusted 51.1 in September from a final reading of 51.4 in August and below analyst expectations of 51.8.
Tuesday, September 24
08:30 — Canada Retail Sales:
This report will present changes in retails sales for July 2013. In June 2013, retails sales fell by 0.8%.
10:00 — CB Consumer Confidence:
In August, consumer confidence index rose to 81.5 (month-over-month). Based on current expectations, the September index is expected to show a further increase.
Wednesday, September 25
08:30 — Core Durable Goods Orders (m/m):
Monthly report for August may indicate changes in US demand for commodities such as oil and gas. As of July 2013, new orders of manufactured durable goods declined to $485 billion. If this report shows another drop in new orders, then commodity prices and the US dollar may get adversely impacted.
10:00 — US New Home Sales:
Sales of new homes decline sharply to an annual rate of 394K in July — a 13.4% drop (month- over-month). If the number of home sales decline for August as well, this may suggest the housing market in the US is suffering due to the hike in interest rates.
10:30 — Crude Oil Inventories:
EIA (Energy Information Administration) will publish its weekly update on US crude oil inventories for the week ending on September 20, 2013.
Thursday, September 26
04:30 — Great Britain Current Account:
Quarterly report will present changes in trade gap for Q2. Based on the previous update, UK deficit increased to 14.5 billion pounds.
08:30 — US Unemployment Claims:
Weekly report will refer to changes in initial jobless claims for the week ending on September 20, 2013. Last week jobless claims increased by 15K to reach 294K. This upcoming weekly update may affect the US dollar and consequently commodities and stocks markets.
10:00 — US Pending Home Sales:
This report will present developments in pending home sales for August. In July, pending home sales index fell by 1.3% (month-over-month).
Friday, September 27
09:55 — University of Michigan Revised Consumer Sentiment:
University of Michigan will publish its revised consumer sentiment monthly update for September.
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