As we look toward a new day, U.S. stock futures are pointing to a modestly negative open. Elsewhere, Asian markets were mixed overnight, while stocks in Europe are trading just above breakeven. Meanwhile, oil futures are up slightly, at around $89.40 a barrel, but still close to their lowest point since early February.
This morning, the seasonally adjusted annual rate (SAAR) for July housing starts was released, with the reported 1.446 million units falling short of the 1.56 figure for June and the consensus estimate of 1.53 million. Meanwhile, building permits, which are more of a forward-looking indicator came in at an SAAR of 1.674 million, down slightly from the 1.7 million reported for June.
Investors are also keenly interested in how consumer spending behavior is adapting to inflation. Walmart (WMT) reported better-than-expected second-quarter results this morning, but continued to warn that margins would face further pressure in the second half. Home Depot (HD) also released earnings that topped consensus estimates. However, total customer transactions slipped 3% year over year. July figures for U.S. retail sales are due out Wednesday morning, where a slowdown from the 1% increase reported in June is expected.
Also on the docket for Wednesday is the release of the minutes from the Federal Reserve’s meeting in July. Its contents will be pored over by traders to see if they can glean any clues to the lead bank’s next steps. Meanwhile, Thursday brings the latest data on existing home sales. With the SAAR of 5.12 reported in June, the consensus is calling for July’s numbers to ease to about 4.81 million.
Summing up Monday’s session, stocks started the day in the red, after China reported that its economy slowed in July, prompting surprise interest-rate cuts by its central bank. Despite the recent curtailing of coronavirus-related lockdowns, the world’s second-largest economy experienced declines in retail sales, factory output, and consumer spending, while real estate prices continued to slide. The prospect of falling demand from that voracious nation sent oil prices plunging 5%. However, U.S. stocks rebounded later in the session to close on a positive note.
Looking at the numbers, the Dow Jones Industrial Average closed up 151 points, while the S&P 500 (which has racked up four straight weeks of gains) advanced 16 points. Meanwhile, the tech-focused NASDAQ composite tacked on 80 points. Breaking it down by sectors, consumer staples led the way with a gain of 1.1%, while utilities moved up 0.8%. In the negative column, energy shares took a big hit, losing about 2% of their market value on the session.
– Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
