Weekly Economic Review (July 22 - July 26, 2013)
US stocks traded lower this week, as mixed earnings, and concerns about China's economic slowdown weighed on investor sentiment.
Following recent records in both the Dow and the S&P 500, investors have embraced companies that have outperformed earnings expectations while taking a cautious approach to the overall market
With the Fed meeting and non-farm payrolls due next week, there will be plenty of news to move the market in the week ahead. US data has been more mixed in recent weeks, suggesting that next Friday's employment report may not be as good as recent months, in part because the housing market does look to have softened in light of higher interest rates
Following is an economic review for the week July 22 - July 26, 2013.
Monday, July 22
Existing US Existing Home Sales:
Existing home sales unexpectedly dropped in June (5.08 million vs. expected 5.26 million), hurt by a lack of supply and rising mortgage rates.
Tuesday, July 23
Canada Retail Sales (May 2013):
Retail sales increased 1.9% vs. expectations of an increase of 0.4%, the biggest month-to-month jump since March 2010.
HSBC China Flash Manufacturing PMI:
China's manufacturing-sector activity slowed further in July, with new factory orders deteriorating at a faster pace. HSBC Chinese manufacturing IPMI dropped to 47.7, an 11-month low. It was down from a final result of 48.2 for June, with any reading below 50 indicating a contraction in activity.
Wednesday, July 24
US New Home Sales (June 2013):
New home sales in June surged despite higher mortgage rates, maintaining momentum for a key sector driving the economic recovery. New-home sales increased 8.3% last month to a seasonally adjusted rate of 497K, the highest level since May 2008.
Crude Oil Inventories:
Oil inventories in the US fell by 2.8 million barrels to 364.2 million barrels for the week ended July 19.
Thursday, July 25
UK Preliminary GDP Q2 2013:
UK preliminary GDP for Q2 2013 came in at 0.6%, in line with expectations. All four main industrial groupings within the economy (agriculture, production, construction and services) increased in Q2 2013 compared with Q1 2013. The largest contribution to Q2 2013 GDP growth came from services; these industries increased by 0.6% contributing 0.48 percentage points to the 0.6% increase in GDP.
US Unemployment Claims:
US unemployment claims increased by 7K for the week ended July 19 to a seasonally adjusted 343K. The increase follows a drop of 22K the previous week. But the broader trend is consistent with an improving job market.
US Core Durable Goods:
US durable goods orders rose more-than-expected in June (4.2% vs. 1.3%), while core orders flat vs. expectations for a 0.5% increase.
Friday, July 26
Revised University of Michigan Consumer Sentiment:
US consumer sentiment rose at the end of July to its highest level in six years, as Americans' view of current conditions improved. The final reading of the July consumer sentiment index came in above expectations, revised up to 85.1 from 83.9 in the preliminary report, and compared to 84.1 in June.
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