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The Week Ahead for the USD and US Markets
The
USD started the past week strongly, making good headway against most of its
counterparts. However it dropped sharply on Thursday, from 83.3 to 82.6
according to US Dollar Index. The depreciation was mainly caused by Bernanke’s
comments and a slew of European data showing signs of a recovery.
The stock market ended the week strong S&P 500 and Dow Jones Indexes rose 3.2% and 3.5%
respectively. The star of the week was the NASDAQ Composite making a steep
incline up 4.2%.
The increases are
attributable to better better-than-expected second quarter earnings reports and
better than expected European data.
In
comparison with the several bullish data releases reported in Euro Zone, recent
US
releases haven’t been quite as bullish for the USD and this trend is expected
to continue next week. The week ahead will
prove to be busy, especially on Friday. The GDP, Consumer Confidence and other
important indicators will be released. Any each of them can have a significant
impact on the US
stock and currency markets.
Monday, 26 July
Today the New Home Sales is going to release following
last week’s Existing Home Sales data. The New Home Sales peaked= at 504K in
April. However, the figure for May decreased dramatically to only 300K, whose
forecast was 446K. Now the expectation for June is adjusted to a lower level at
317K. Taking last week’s Existing Home Sales data (0.19M more than forecast)
into account, the New Home Sales is likely to rise.
Tuesday, 27 July
At 10:00 am, the Conference
Board Inc. will report its Consumer Confidence for July. This is an important
report and a leading indicator of consumer spending (a major driver for overall
economic activity). The forecast for this month has already been modified downwards
to 51.5.
Wednesday, 28 July
The Census Bureau will release
the Core Durable Goods Orders at 8:30 am. This release measures the total value
of new purchase orders placed with manufacturers for durable goods. Expectations
are for the release to come in at 0.6%
Thursday, 29 July
Jobless Claims is released by the Department of Labor
on Thursday. The impact of this indicator fluctuates from week to week, with
recent stress test results and other good data from the Euro zone traders will
be paying attention and looking for some kind of confirmation from the jobs
market.
Friday, 30 July
At 8:30 am GDP figures for
the 2nd quarter will be released, GDP measures annualized change in the
inflation-adjusted value of all goods and services produced by the economy and
offers a broad measure of economic health. This is the earliest release for the
2nd quarter and thus tends to have the most impact on the markets.
GDP growth for the 1st quarter’s third estimate was 2.7% in an
annual basis, after being revised down from the previous estimate 3.0% and the
initial estimate of 3.2%, which means an increase in imports and decrease in exports.
Investors will judge the markets based on these data. At the same time, GDP
price index, which can measure the level of inflation, grew annualized 1.1%
from the previous estimate.
At 9.55 am Consumer Sentiment
for July 2010 will be announced, Consumer sentiment reflects the consumer
attitudes to the economy. It is directly related to the consumer spending
power. The consumer sentiment index released in the mid-July plunged, down to
66.5
Key words for the week: New Home Sales, Consumer Confidence, Durable Goods
Orders, Petroleum Status Report, Jobless Claims, GDP, Employment Cost Index,
Consumer Sentiment
»
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Well even if the worst results imaginable came out the stockmarket will still rise just like all the banks passed the stress tests,really is crazy stuff.
Hot off the press from NYT.
Here's some interesting reading that may sway markets:
Ah! Some more deck chairs to contend with. We shall see.
What's that rushing sound?
Nothing to worry about. This ship is unsinkable.